FTX Begins $900M Payout to Eligible Creditors Amid Global Distribution Hurdles

FTX has begun distributing $900 million to creditors who cleared their claims by June 16 and completed onboarding with an available provider. This payout is expected to reach holders of allowed claims in Classes 5A, 5B, 6A, 6B, and 7 within one to three business days from July 31.

However, not all creditors will receive payment. Residents of 45 countries, including Afghanistan, China, Cuba, Iran, North Korea, and Russia, are currently blocked due to provider coverage issues. FTX notes that this roster is subject to change and additional options may be added in the future.

Creditors who can access a provider still face a significant decision: distributions cannot be split across providers, and the selection is final. By onboarding, a creditor irrevocably gives up receiving cash directly from FTX and directs FTX to pay the chosen provider instead.

FTX's distribution dashboard FAQ also warns that allowed-claim holders who do not successfully onboard within six months from July 31 may forfeit their right to distributions. This means that missing the June 16 deadline for clearing claims can have severe consequences, and failing to onboard for a longer period creates an additional risk.

It's worth noting that FTX's announced cumulative distributions of 105% for Classes 5A and 5B, 103% for Classes 6A and 6B, and 120% for Class 7 do not represent gains against current crypto prices. Instead, they are percentages of allowed plan claims, calculated using a court-approved conversion table to determine digital-asset claim values.