The FTX Recovery Trust has begun distributing a second round of payments totaling $5 billion to eligible creditors. This marks a significant step in the ongoing effort to reimburse those affected by the collapse of the now-defunct cryptocurrency exchange. While the payouts aim to address outstanding claims, they have sparked both controversy and speculation about their potential impact on the crypto markets.
$5 Billion Distributed Across Multiple Claim Classes
On May 30, the FTX Recovery Trust initiated payouts to creditors in the Convenience and Non-Convenience Classes who completed the required pre-distribution processes. According to a May 28 announcement, the distribution includes:
- Dotcom Customer Entitlement Claims : Receiving a 72% distribution.
- US Customer Entitlement Claims : Receiving a 54% distribution.
- Convenience Claims : Receiving a 120% distribution.
- General Unsecured Claims and Digital Asset Loan Claims: Each receiving a 61% distribution.
FTX $5 Billion payouts will be processing by official distribution partners, Kraken and BitGo. Recipients will be able to receive their funds within one to two business days.
This follows the first round of payouts, which occurred on February 18, totaling $1.2 billion for creditors with claims under $50,000. At the time, Alvin Kan, Chief Operating Officer at Bitget Wallet, noted that a “significant portion” of the funds could be reinvested into the crypto markets. This reinvestment potentially influences liquidity and price volatility.
Controversy Surrounding the Reimbursement Plan
Despite the payouts, the reimbursement plan has drawn criticism from creditors who feel shortchanged by the process. In September 2024, Sunil Kavuri, an FTX creditor, shared court documents. These mean that creditors would be reimbursed based on the value of their holdings at the time their petition was filed—rather than at current market prices.
“Crypto holders are not whole at petition date prices as confirmed by the debtors, the United States Department of Justice, and Judge Kaplan,” Kavuri told Cointelegraph.
For context, the petitions were filed during the depths of the crypto winter. At that time, the price of Bitcoin (BTC) was approximately $16,000 —a far cry from its current price of $105,528. As a result, many creditors received only 10%–25% of the current value of their crypto holdings.
Adding to the frustration, Kavuri highlighted in February 2025 that creditors in 163 countries, including residents of Egypt, Iran, Russian, Greenland, and Pakistan, are ineligible to receive reimbursements due to regulatory restrictions.
Potential Market Impact
FTX $5 Billion payouts act has caught the attention of crypto investors and speculators, who are closely monitoring whether the funds will be reinvested into the digital asset markets. If a significant portion of the reimbursements is offloaded or swapped on retail exchanges, it could lead to increased price volatility.
This concern echoes sentiments expressed earlier this year, when the $1.2 billion payout raised similar questions about market liquidity.
What’s Next for FTX Creditors?
While the latest payouts provide some relief to creditors, the reimbursement process remains fraught with challenges. Many creditors feel that the plan fails to adequately compensate them for their losses, particularly given the substantial increase in cryptocurrency prices.
As the FTX Recovery Trust continues to distribute funds, the broader implications for the crypto market remain uncertain. Will creditors reinvest their reimbursements, or will they opt to cash out? The answer could shape the near-term trajectory of digital asset prices.
