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Bankrupt crypto exchange FTX has begun its second round of creditor repayments, disbursing over $5 billion to approved claimants.
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Market analysts believe the liquidity could trigger renewed activity in the crypto market, particularly among altcoins.
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Meanwhile, the failed crypto exchange has warned users to beware of phishing scams linked to the distribution process.
FTX has initiated $5 billion in repayments to creditors, sparking discussion on market liquidity and potential altcoin activity—stay vigilant against scams.
Will FTX Payout Spark a Potential Market Rally?
In a May 30 update, the defunct firm confirmed that the second round of distribution targets eligible claims in the Convenience and Non-Convenience Classes that have met the necessary pre-distribution conditions.
“This 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 Ray III, FTX CEO, said.
The exchange furthered that payouts began the same day and are expected to be completed within one to three business days. BitGo and Kraken are handling the distribution.
Sunil Kavuri, a prominent FTX creditor advocate, shared that Kraken began processing FTX US distributions on May 30, with international disbursements scheduled for June 2. The total for US claims stands at $312 million, of which $168 million belongs to claims over $50,000.
Meanwhile, FTX creditors are receiving varying amounts depending on their classification.
The exchange pointed out that customers with Dotcom Entitlement Claims are receiving 72% of their eligible funds, while those under US Customer Entitlement Claims receive 54%.
Convenience Claimants, typically with smaller balances, will receive 120% of their initial claims. In addition, roughly 61% of General Unsecured and Digital Asset Loan Claims will also be repaid during this phase.
Meanwhile, FTX has also issued a security notice warning users of rising phishing scams tied to the payout process. The exchange urged all claimants to remain vigilant and verify communication sources before taking any action.
This is because several industry analysts are watching the distributions closely and are predicting a potential uptick in crypto trading activity. Since much of the payout will be in stablecoins, recipients may quickly reallocate funds into other digital assets.
Market analyst Miles Deutscher believes this liquidity could act as a short-term catalyst for altcoins, especially as investor sentiment improves.
No one is talking about it, but on Friday, FTX is distributing $5b of stablecoins to creditors.
This liquidity injection could be the catalyst altcoins need to pump.
Watch my full analysis (with my new alt picks for the next leg) 👉 https://t.co/5TlR2KczI9 pic.twitter.com/yw6PnIL17U
— Miles Deutscher (@milesdeutscher) May 28, 2025
Researchers at Coinbase also echoed this view. They suggested that institutional recipients may look to re-enter the market, especially as regulatory clarity improves across key jurisdictions.
Conclusion
In summary, FTX’s creditor repayments represent a significant step in the ongoing bankruptcy process, potentially revitalizing the crypto market atmosphere. With varying payout percentages and heightened security concerns, stakeholders are advised to remain alert as the situation unfolds. The recovery efforts not only aim to satisfy creditors but may also lay the groundwork for renewed investment interest in a recovering market.
