FTX begins its second payout round of $5 billion

FTX has started its second distribution round of payments to its creditors. The exchange is set to pay more than $5 billion to holders in the Plan’s Convenience and Non-Convenience Classes who met pre-distribution requirements.

In a post on X on Friday, the FTX stated that creditors should begin seeing the funds reflected in their accounts within one to three business days.

FTX revealed second round payout breakdown

On Friday, John J. Ray III, Plan Administrator of the FTX Recovery Trust, commented on the rollout’s start, saying:

“Today’s announcement represents continued progress returning cash to FTX’s customers and creditors. I am proud of the outstanding success of the recoveries to date. Our work continues on recovering more for creditors and resolving outstanding claims.”

John J. Ray III

On X, the exchange also asked customers to remain cautious of phishing emails and scam websites from channels that may appear to look like the FTX Customer Portal.

Meanwhile, crypto investors and speculators are waiting for the impact of reimbursements, knowing how they could easily sway digital asset market prices if recipients sell or swap their funds on retail exchanges.

In February, FTX completed its first round of repayments, distributing $1.2 billion to holders with claims under $50,000. At the time, Alvin Kan, COO of Bitget Wallet, suggested that a significant portion of these funds might find their way back into the crypto markets.

FTX payouts are based on 2022 crypto prices

During its first round of payments, Julian Grigo, head of institutions and fintech at asset custody, argued that some creditors may have been dissatisfied.

He claimed that while its reimbursements brought relief to some of its customers, there were still some concerns over the plan. He argued that most holders will only get a portion of their original holdings, and then again, they will only be repaid based on asset prices at the time of the exchange’s collapse.

BTC-related repayments, especially, have troubled investors since they are calculated using November 2022 valuations, when it was only trading at around $20,000.  Since then, the crypto asset has risen in value, currently trading between $90,000 and $112,000.

The pricing differences have undoubtedly caused analysts to question fair value determination in bankruptcy proceedings.

FTX creditor Sunil Kavuri and other creditors had previously filed a petition to have the exchange repay customers as per current market prices. However, the court ruled against the proposal, and Kavuri claims that, as a result, creditors received only 10%–25% of the current value of their crypto holdings.

Earlier this year, Kavuri also called the people’s attention to multiple creditors in 163 countries who are ineligible to receive reimbursements. He stated that countries like Egypt, Pakistan, Greenland, Iran, Russia, and China have imposed restrictions on custodial exchanges Kraken and BitGo; hence, residents cannot claim distributions.

He noted that China is the largest jurisdiction ineligible for FTX claim distributions, seeing that it makes up about 8% of the global customer base. 

KEY Difference Wire: the secret tool crypto projects use to get guaranteed media coverage