FTX Bankruptcy Milestone: $2.2 Billion Distribution Paves Way for Near-Full Creditor Compensation

FTX creditors are poised to receive a landmark $2.2 billion distribution within days, marking a historic step toward near-complete recovery in one of crypto's most catastrophic collapses. The estate announced that verified claimants will receive payouts via BitGo, Kraken, or Payoneer within 1-3 days after March 31, signaling an unprecedented resolution in the exchange's bankruptcy saga. This development unfolds as prosecutors vigorously oppose co-founder Sam Bankman-Fried's bid for a new trial, while he serves a 25-year prison sentence for fraud and conspiracy convictions related to FTX's 2023 collapse.

FTX raises payouts to creditors

FTX designed a payout system that groups creditors into classes representing different types of claims, such as customer funds, loans, or smaller claims, for compensation. Because the case involves people from different nations with varying losses, the entity will assess the type of claim and the amount owed to avoid confusion and treat all creditors consistently under the same rules.

Furthermore, international users under Class 5A will receive an extra 18%, bringing their total recovery to about 96% and giving them hope that full repayment is well within reach after waiting for too long. 

Meanwhile, U.S. users in Class 5B will receive an extra 5%, bringing their total recovery to 100%, offering hope to other users waiting to reach the same level. Similarly, creditors under Classes 6A and 6B, mainly non-customer claims such as general unsecured claims and digital asset loan claims, will receive an additional 15%, bringing their recovery to 100%.

For smaller claims under Class 7, creditors will receive more than they lost (up to 120%), a move never seen before in most bankruptcy cases. 

So far, FTX has returned more than $6 billion to creditors, including the $2.2 billion scheduled for March, about $1.2 billion in early 2025, another $5 billion around May 2025, and $1.6 billion payout in September 2025.

Back in 2022, when FTX collapsed, there was a lot of uncertainty in the industry about fund recovery, but the situation is starting to change, with more payouts and higher recovery rates.

Therefore, the latest $2.2 billion distribution indicates that full recovery is imminent after a long and hopeless wait. 

FTX sets the payment process and deadlines for creditors and equity holders

FTX uses distribution service providers to compensate users in U.S. dollars based on the options each platform supports, reducing delays and confusion and making the process easier to manage.

Each provider works differently, and users can choose how they receive funds based on the options available in their region. For example, providers like BitGo and Kraken allow users to receive funds in cash, crypto, or stablecoins, and even transfer the assets to a different wallet.

On the other hand, Payoneer sends money directly to bank accounts, depending on the user’s location, regional laws, and transfer minimums.

In the upcoming payout starting March 31, eligible users will receive their funds within 1 to 3 business days, but they must first log in to the FTX customer Portal, complete identity checks (Know Your Customer, or KYC), and then submit tax forms. 

After that, users must onboard with one of the approved distribution providers, including BitGo, Kraken, or Payoneer, based on factors such as location, payment options, and personal preference, as they cannot change their choice.

Users give up their right to receive direct payments from FTX once they choose a provider, so they must accept the conditions before completing the onboarding process, as it is irreversible.

In addition to compensating creditors, FTX will also pay equity holders from May 29, 2026, to April 30, 2026. And just as creditors do, equity holders must confirm their ownership of shares, complete identity checks, submit tax forms, and be officially listed in the records as eligible holders.

Payments to equity holders will be made from a separate system, the Preferred Shareholder Remission Fund Trust, which is specifically designed to handle payments to this group.

The smartest crypto minds already read our newsletter. Want in? Join them.