FTX Creditors to Reap $1.6B Windfall in Third Major Payout on September 30

Another massive payout hits—creditors brace for cash infusion as FTX's restructuring saga continues.

The Numbers Don't Lie

With $1.6 billion set for distribution, this marks the third—and one of the largest—recovery efforts since the exchange's collapse. Not exactly pocket change, even by crypto standards.

Behind the Scenes

Payout processes are rolling ahead of schedule—a rare win in an industry where 'soon' usually means 'maybe never.' Funds are expected to hit creditor accounts by month's end, assuming no last-minute bureaucratic hiccups.

Bigger Picture

While $1.6 billion sounds impressive, it’s still just a fraction of what was lost—a sobering reminder that in crypto, even the bailouts come with a side of humble pie. But hey—at least it’s actual cash this time, not another promise wrapped in a roadmap.

FTX collapse was due to mismanagement of funds

Under FTX’s operation, its users were allowed to purchase, sell, and make speculations about the future prices of widely adopted cryptocurrencies and tokens. This greatly attracted customers and increased the exchange’s user base.

However, its CEO, Bankman-Fried, alongside his senior partners, used customers’ funds invested in the exchange to cover high-risk investments that Alameda Research, a hedge fund connected to the company, made without their consent.

Consequently, this mismanagement of customers’ funds resulted in FTX’s bankruptcy, with billions of investor funds missing. To track down the missing funds, John J. RAY III, an American attorney and CEO specializing in recovering funds from failed corporations, was assigned to get them back. While working on this, the American attorney pointed out that the exchange’s bankruptcy was greater than that of Enron, an energy firm, in the early 2000s. 

FTX’s CEO was arrested with fraud charges 

Following his actions, Sam Bankman-Fried was arrested and later charged with defrauding clients. When the charges were presented in court, he was legally jailed. This was made possible because prominent figures from Bankman-Fried’s close team decided to testify against him during the trial.

Interestingly, FTX co-founder Gary Wang, former Alameda CEO Caroline Ellison, and Nishad Singh, who used to lead engineering at FTX, acknowledged that they committed crimes because Bankman-Fried had commanded them to do so.

After the verdict was announced, a Lawyer and former United States Attorney for the Southern District of New York weighed in on the situation. He commented that Sam Bankman-Fried’s financial fraud was one of the largest in the history of America. According to him, the CEO carried out this multi-million dollar scheme to position himself as the ruler of crypto.

Meanwhile, to serve as a warning to any individual with intentions similar to those of Bankman-Fried, the relevant authorities sentenced the CEO to serve 25 years in prison in Southern California for fraud and other offenses.

On related developments, Bankman-Fried’s dormant X account suddenly became active this week, mass-following other profiles after months of silence. The unexpected activity sparked speculation and fueled a rally in the FTT token, which briefly climbed above $1.

As earlier reported by Cryptopolitan, the renewed activity raised questions about whether the former FTX founder, currently serving time in prison, somehow signals continued interest in crypto, or even hints at an early release. However, there has been no official word regarding his release, and the FTX bankruptcy process is still moving forward, with the next creditor distribution scheduled for September 30.

On-chain data suggests Bankman-Fried has little to no funds left for trading, with one of his meme wallets now holding just 0.67 SOL. Meanwhile, wallets associated with Alameda Research continue to receive allocations of SOL from earlier distributions, but those funds are being directed toward bankruptcy settlements rather than trading.

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