Ex-FTX users report funds being released in $900M distribution round

The FTX Recovery Trust has initiated its fifth round of fund distributions to creditors affected by the collapse of the cryptocurrency exchange FTX. In this latest distribution, approximately $900 million was sent to users, with funds being transferred through intermediaries such as the crypto exchange Kraken, as reported by former FTX user Sunil Kavuri. This payout follows a notification from FTX that funds had been sent to Kraken, which then released them according to the planned schedule involving multiple exchanges, including BitGo and Payoneer.

Since FTX's bankruptcy filing in 2022, the trust has made these periodic distributions in an effort to reimburse users who had lost access to their assets for years. To date, it is estimated that the trust has returned about $11 billion to affected creditors. FTX’s collapse marked one of the largest and most notable failures in the crypto sector, linked to broader market downturns and allegations of improper use of customer funds.

Legal proceedings remain ongoing following the exchange's downfall. Key former executives, including ex-CEO Sam Bankman-Fried and Ryan Salame, co-CEO of FTX’s Bahamian branch, remain in federal custody as of July 2024, while Caroline Ellison, former CEO of Alameda Research, was released after more than a year in custody. Separately, a court recently ruled that the FTX trust cannot pursue damages against Binance and its founder Changpeng Zhao, although claims for clawing back $1.76 billion related to FTX stake repurchases remain active amid allegations tied to Bankman-Fried’s misconduct.

These developments underscore the long and complex process of unwinding FTX’s bankruptcy and returning funds to users, highlighting both legal challenges and substantial creditor reimbursements, which are key to resolving the fallout from one of crypto’s most prominent exchange failures.