FTX Slashes Claims Reserve by $1.9B – Next Wave of Payouts Imminent
FTX just freed up nearly $2 billion in trapped capital—creditors, check your wallets.
The haircut heard ‘round Crypto
The collapsed exchange quietly trimmed its claims reserve (read: emergency fund for angry investors) by a cool $1.9 billion. Now that the lawyers’ golden parachute is safely funded, the real payouts can begin.
Bankruptcy math, crypto-style
This isn’t your grandpa’s Chapter 11. FTX’s ‘reserve cut’ means either (a) they overestimated liabilities like a rookie trader leveraging 100x, or (b) someone finally found SBF’s infamous ‘hidden spreadsheet.’ Either way—liquidators are pressing send.
The cynical take
Nothing unclogs a bankruptcy process faster than realizing you can’t charge hourly fees forever. Next up: ‘discovery’ of another $3B in mislabeled Dogecoin wallets.
FTX Wins Court Approval to Slash Claims Reserve by $1.9B
In another development, FTX received approval from the Bankruptcy Court to reduce its disputed claims reserve by $1.9 billion, from $6.5 billion to $4.3 billion.
The adjustment frees up additional cash for the next phase of payouts to approved creditors.
FTX emphasized that distributions will only be made to claimants who have completed Know Your Customer (KYC) verification, submitted the necessary tax forms, and onboarded with one of the three distribution platforms.
For those with transferred claims, the transfer must be fully processed and recorded on the official register before the August 15 record date.
This marks another step forward in the exchange’s restructuring process.
Earlier this year, FTX began repaying creditors after securing court approval for its redistribution plan, and to date, has returned approximately $6.2 billion.
FTX, once a dominant player in the crypto space, collapsed in November 2022 following a liquidity crisis triggered by revelations about its balance sheet.
The fallout led to criminal charges against founder Sam Bankman-Fried, who was sentenced in 2023 to 25 years in prison for defrauding customers and investors of more than $11 billion.
However, he is now projected to be released from federal prison on December 14, 2044, after serving less than 21 years of his 25-year sentence for fraud tied to the FTX collapse for good behavior.
He was also fined over $11 billion. Federal records confirm that Bankman-Fried has been moved from New York to a transfer facility in Oklahoma following nearly two years behind bars.
Chinese Creditor Challenges FTX Plan to Block Global Payouts
A Chinese creditor representing over 300 users is opposing FTX’s proposal to restrict payouts in 49 jurisdictions, including China, arguing it is legally unfounded and unfair.
Restricted jurisdictions
FTX received 70 objections from creditors
Suggests include following Voyager/Celsius procedures to make payment to Restricted Jurisdictions pic.twitter.com/0w960OC2EA
The creditor, Weiwei Ji, holds $15 million in verified claims and says Chinese users should not be penalized due to regulatory assumptions, especially with legal pathways through Hong Kong.
The objection follows a motion filed by the FTX Recovery Trust seeking to evaluate claims across 49 jurisdictions flagged as “potentially restricted.” These include China, Russia, and Pakistan.
Claims from the 49 jurisdictions total roughly $800 million, with China accounting for the vast majority, 82%, according to figures cited by The Block.
