The FTX Recovery Trust, the organization tasked with repaying former customers and creditors of the defunct exchange, has announced a third distribution of nearly $1.6 billion. According to a press release on Friday, the distribution will begin on September 30. Funds will be transferred to creditors’ accounts via BitGo, Kraken, or Payoneer within three business days. Retail Customers First The repayment plan prioritizes two distinct groups of creditors. The first is the convenience class, which consists of smaller creditors and retail traders. This group makes up the majority of FTX’s customer base and, surprisingly, will recover approximately 120% of their claims, ultimately receiving more than they lost. In contrast, the non-convenience class, consisting of larger institutional players with more complex claims, will receive smaller payouts. This approach highlights a clear priority within the repayment plan, protecting retail customers first. The latest round of payouts will increase the total recovery for various creditor groups. U.S. customers will receive an additional 40% of their claims, bringing their total recovery to 95%. Similarly, Dotcom customers, who used the exchange’s international arm, are set to receive a further 6% payout, raising their total to 78%. Furthermore, general unsecured and digital asset loan claims will be compensated at a rate of 24%, increasing their overall recovery to 85%. Lastly, for the convenience class, which is composed primarily of small creditors and everyday traders, their claims will be paid out at 120% of face value, meaning they will recover more than their initial losses. Repayments History and Market Impact The FTX Recovery Trust has been steadily working to make things right, with over $6.2 billion already paid out to creditors this year alone, a $1.2 billion distribution in February followed by a massive $5 billion payout in May. With assets valued at a staggering $16.5 billion set aside, the trust is showing its commitment after court approval to reduce the disputed claims. Although there were concerns about the first two repayments causing short-term volatility, the actual impact was minimal. Many creditors, particularly the retail “convenience class,” received their payouts in fiat currency rather than crypto. This decision, while frustrating for those who missed out on the crypto market’s significant rebound since late 2022, largely prevented a sudden sell-off of major assets like Bitcoin or Ethereum. The post FTX Recovery Trust Announces Third $1.6B Creditor Distribution appeared first on CryptoPotato .
