Bankrupt Crypto Exchange FTX To Shell Out $5,400,000,000 to Creditors at the End of the Month

The bankrupt crypto exchange FTX plans to shell out $5.4 billion in a wave of payments to creditors at the end of the month.

Eligible creditors will receive funds via BitGo or Kraken within 1-3 business days from May 30th, per a new press release from the exchange.

FTX will make payouts from its $11.4 billion cash reserves, and the exchange says subsequent payouts will be announced at a later date.

The bankrupt firm classifies its main creditors as individuals and institutions with millions of dollars stashed in the platform before its collapse. Meanwhile, smaller creditors categorized in FTX’s “Convenience Class” started  receiving distributions in February.

In October, a US bankruptcy court  greenlit  FTX’s plan to distribute between $14.7 billion and $16.5 billion worth of payouts to the crypto exchange’s former customers.

The plan calls for 98% of the exchange’s creditors to receive approximately 119% of the value of their holdings on the day FTX filed for bankruptcy in November 2022.

The increased payouts are thanks to crypto prices and FTX’s 8% stake in the AI (artificial intelligence) safety and research company Anthropic.

FTX imploded and filed for bankruptcy amid accusations that its then-chief executive, Sam Bankman-Fried, mishandled the exchange’s funds by loaning out billions of dollars worth of customer deposits to Alameda Research, the firm’s trading arm.

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