FTX starts a $900M repayment round: what 'getting your money back' really looks like

The trust winding down collapsed crypto exchange FTX said it will begin paying out about $900 million to former customers on July 31, the fifth round of repayments since the exchange failed in November 2022. Eligible creditors will receive funds through BitGo, Kraken or Payoneer accounts within one to three business days. It is a reminder that money trapped in a failed exchange can sometimes come back, but slowly, partially, and only after years.

The payout covers what the recovery plan calls "convenience" and "non-convenience" classes, essentially smaller and larger claims. Smaller claims, those under $50,000, are set to receive 120% of their approved amount, while larger ones receive between 103% and 105%. Those figures sound generous, but they are based on the dollar value of each account back in November 2022, when crypto prices were far lower. A user who held Bitcoin then is repaid a claim measured at that old price, not at what the coins would be worth today.

With this round, the FTX Recovery Trust will have returned about $10 billion since the bankruptcy, following a $2.2 billion distribution in March. Former chief executive Sam Bankman-Fried, sentenced to 25 years in 2024 for misusing customer funds, remains in federal prison. His appeal was denied last month, and this week the US Senate unanimously adopted a resolution opposing any pardon for him.

For a beginner, the useful lesson is what a "claim" actually is. When you leave coins on an exchange, you do not hold the coins, you hold a promise from the company. If the company fails, that promise becomes a claim in a court process, and you wait in line with everyone else while a trustee works out what can be recovered. FTX creditors are getting a relatively good outcome by the standards of these cases, and it still took more than three years.

That gap between "my balance says X" and "what I can actually withdraw" is the whole risk of trusting someone else to hold your crypto. It does not mean every exchange is dangerous, but it is the reason people say to keep only what you are actively using on a platform, and to remember that a number on a screen is a promise, not the asset itself.