Key facts
- The FTX Recovery Trust has begun its fifth distribution of funds.
- Approximately $900 million is being released to former users.
- This distribution brings the total paid out by the trust to an estimated $11 billion.
- Former FTX user Sunil Kavuri reported receiving funds through Kraken.
- Sam Bankman-Fried and Ryan Salame are currently in federal prison.
- A judge ruled the FTX trust cannot pursue damages against Binance and Changpeng Zhao.
The trust managing assets for the defunct cryptocurrency exchange FTX has commenced its fifth distribution round, releasing $900 million to former users and creditors. This significant payout aims to reimburse users for losses incurred when the exchange collapsed in 2022.
One former FTX user, Sunil Kavuri, reported on X that he had received funds through Kraken, a crypto exchange that acted as a distribution agent. Kavuri stated that FTX had sent the funds to Kraken, which then released them as scheduled. Other distribution agents involved in this process include BitGo and Payoneer.
This marks the fifth attempt by the FTX Recovery Trust to repay its creditors. With this latest distribution, the trust is estimated to have disbursed a total of approximately $11 billion to users who lost access to their funds. FTX's downfall in 2022, amidst a broader market downturn, led to criminal charges against its executives for alleged misuse of user funds.
Several key figures from FTX and its affiliated entities are facing legal consequences. Sam Bankman-Fried, the former CEO of FTX, and Ryan Salame, co-CEO of FTX's Bahamian affiliate, were reportedly still in federal prison as of July. Caroline Ellison, former CEO of Alameda Research, was released in January after serving over a year.
In a recent development, a bankruptcy court judge ruled that the FTX trust could not pursue damages against the crypto exchange Binance and its former CEO, Changpeng Zhao. However, Chief Judge Karen B. Owens did not dismiss the trust's claim seeking to recover $1.76 billion from Binance, which was used to repurchase its stake in FTX and was allegedly tied to Bankman-Fried's actions.