Bankrupt FTX Exchange Will Distribute Funds After Court Releases Reserve Fund, Only for KYC-Completed Creditors with Cutoff Date of 8/15.
FTX Trading Ltd. and FTX Recovery Trust confirmed they will begin distributing funds to creditors on 9/30, after receiving court approval to release $1.9 billion from the previously frozen reserve fund. The court's decision reduced the total reserve fund for disputed claims from $6.5 billion to $4.3 billion, thereby releasing $1.9 billion for payment. However, the payment will only apply to creditors who have completed administrative procedures and are on the approved list.
The cutoff date to determine eligible recipients for the next payment is 8/15. Eligible claims include Class 5 (Customer Entitlement Claims), Class 6 (General Unsecured Claims), and certain Convenience Claims that were approved in previous payment rounds but not yet paid. These claims fall under the Restructuring Plan submitted by FTX, and creditors not on the list will not receive payment.
FTX emphasized that only approved creditors who completed the KYC process will receive funds. Payment processing entities for this distribution include BitGo, Kraken, and Payoneer. If creditors have not completed KYC, submitted tax forms, or linked accounts with one of these three platforms, they will not receive payment in this distribution.
Strict Conditions and Transfer of Responsibility
FTX also confirmed that once funds are transferred to the Distribution Service Provider, responsibility will belong to the recipient. The company clearly stated that when FTX completes fund distribution to the Distribution Service Provider's account, the recipient must manage their assets independently. This means FTX will not be responsible if creditors' funds encounter issues after successful transfer.
For transferred claims, FTX warned that these claims must comply with very strict conditions. Transfers are only valid if officially recorded in the claim registry and must pass a 21-day notification period without objection. This regulation specifically applies to claims transferred and recognized as of 8/15.
