FTX , the cryptocurrency exchange, has now started round two of sending back funds to its users. The exchange has returned to the convenience class creditors and is considering the next steps for those in the non-convenience class. That means if you traded on the exchange and didn’t send over a passport picture, you might still get some crypto back. To the extent that FTX can return some of these assets, that’s a positive development, said James Murphy, an associate professor at American University’s Washington College of Law. The firm has announced that qualifying customers should see their funds credited to their accounts within one to three business days from the time of the announcement. This is an initial step in what promises to be a rather long recovery for creditors following FTX’s sudden collapse. Understanding the Second Distribution: Who Benefits and What to Expect The second distribution from FTX bankrupt estate marks one of the biggest single-payout moments of the whole bankruptcy case. This time, 5 billion dollars is being handed over in a kind of 50-50 split between two main categories of creditors: the convenient class and the non-convenient class. Now, the convenient class, according to FTX and its lawyers, generally includes smaller account holders with balances below 1 million dollars, while the non-convenient class includes anyone with an account balance above that threshold. So, in the convenient class, we’ve got a bunch of smaller account holders, and in the non-convenient class, we’ve got larger account holders and what seems to be a lot of institutional clients. (1/3) FTX today announced that it has commenced the Second Distribution of more than $5 billion to holders of allowed claims in the Plan’s Convenience and Non-Convenience Classes that have completed the pre-distribution requirements. — FTX (@FTX_Official) May 30, 2025 For creditors to be included in this second distribution, they were required to finish some verification steps and submit the essential documentation that confirms their claims as valid. Payouts only went to accounts that had completed these steps and were therefore eligible for distributions. Meanwhile, FTX’s attorneys and restructuring team have been working intensively behind the scenes to verify as many claims as possible and ensure that the integrity of the process is above board. Cash should arrive in creditors’ accounts within a few days, so lots of folks are apparently seeing movement on their accounts. For most, movement means something along the lines of this tweet from BlackLine customer account recovery director Joe Kavanagh: “@BlackLine has processed and successfully accounted for the cash received from our unsecured creditors. Thank you for your hard work and transparency in this process!” Security Alert: FTX Warns Against Phishing Scams In conjunction with the announcement of the distribution, FTX also issued an essential security reminder. This reminder was aimed at protecting customers from the upsurge of phishing scams and fraudulent websites attempting to mimic official FTX communications. Since the exchange’s collapse, scam actors have exploited the customer uncertainty created by these events. They have done so by sending deceptive emails and creating fake portals that look like FTX’s official platforms. FTX advises users to exercise extreme caution when receiving any email or link purporting to be from the company. The announcement emphasized that all legitimate communications will originate from verified channels, and implored customers not to click on any links that look even somewhat suspicious or to furnish any amount of sensitive information on sites that are not quite as secure as Fort Knox. This warning comes as an especially critical reminder because customers are getting ready to receive large amounts of money back into their accounts. During times of high customer activity, scammers step up their game in trying to steal login info and personal details. Customers can stay a couple of steps ahead of these threats by being on the lookout and confirming that the communications they’re receiving are actually from the companies they do business with. What the Future Holds for FTX Creditors Although the second distribution is a momentous step, it is just one part of what is an all-too-regular appearance of this ongoing, larger process. The appearances may seem familiar, but the plot is not yet resolved. As FTX keeps going with its long, somewhat drawn-out bankruptcy saga, it and we too can expect some more asset-recovery appearances and creditor claim-finalization appearances, with some releases in between. Here is the latest appearance. For a lot of people, this second payment could almost be like a hug. It may be as close to an apology as we get from FTX. And in the absence of such an apology, companies going under historically haven’t been very good at saying sorry. My excuse-making earlier in this piece aside, this payment could almost position FTX as a better actor than the normal Chapter 11 players. Figuring out what happens next requires remembering that FTX is a global company. Meanwhile, clients must keep themselves updated via FTX’s official communication channels, make sure they complete any remaining tasks that concern them, and follow any and all security notifications that come from the exchange. FTX’s promise to be as upfront and engaging with its creditors as possible is, within my view, crucial to the rebuilding of trust that is necessary for any kind of meaningful resolution to occur. This latest distribution marks a crucial step forward in an unprecedented chapter of crypto history. For the thousands affected, it brings hope that the recovery process is tangible and progressing, even as many challenges remain to be addressed in the months to come. Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services. Follow us on Twitter @nulltxnews to stay updated with the latest Crypto, NFT, AI, Cybersecurity, Distributed Computing, and Metaverse news !
