FTX Distribution Plan and Reserve Reduction
FTX has set the next distribution record date to February 14, with the actual distribution to holders of allowed claims expected to commence on March 31. The exchange also filed an amended notice with the Bankruptcy Court to cut the disputed claims reserve by $2.2 billion, which is subject to the Court’s approval.
If approved, the disputed claims reserve will be reduced from $4.6 billion to $2.4 billion, after which cash will be released for distribution to holders of allowed claims in the next distribution. FTX’s Distribution Service Providers (DSPs), Kraken, Payoneer, and BitGo, will be in charge of making the next distribution.
FTX notified all holders of allowed claims that distributions will only be made to holders who have met pre-distribution requirements. Additionally, distributions for transferred claims will only be made to the transferee holder of an allowed claim that is processed and reflected on the official register of claims maintained by the Notice and Claims Agent. The 21-day notice period must pass without objections for the claim to be considered valid.
Creditor Requirements and Security Advisories
FTX requests creditors to complete KYC with selected DSPs
FTX is urging all customers and creditors to continue completing their Know Your Customer (KYC) verifications and submit their relevant tax forms to onboard with Kraken, Payoneer, or BitGo, in order to receive a distribution. Transferees will also receive their distributions if they are reflected on the official register of claims as of the February 14 record date. The 21-day notice period must also have elapsed without objection.
The exchange has also cautioned all customers to remain aware of phishing email scams as distributions begin. The exchange is warning holders of allowed claims to be on the lookout for emails from scam sites that appear to be received from the FTX Recovery Trust or the Customer Portal. The phishing advisory notice clarified that the Recovery Trust will never request that customers connect their wallets to any external service.
Meanwhile, FTX will be represented by Sullivan & Cromwell LLP as legal counsel. The legal team will also be assisted by Alvarez & Marsal North America LLC as financial advisor, Quinn Emanuel Urquhart & Sullivan LLP as special counsel, and Landis Rath & Cobb LLP as Delaware counsel. The exchange previously received approval from the Bankruptcy Court to reduce the disputed claims reserve by $1.9 billion, from $6.5 billion to $4.3 billion, releasing cash for distribution on the scheduled date (September 30, 2025).
FTX Pursues Legal Action Against Genesis Digital
FTX pursues over $1B lawsuit against Genesis Digital
Reports on January 13 suggest that FTX is still pursuing the lawsuit against Bitcoin miner Genesis Digital to recover $1.15 billion as part of its clawback strategy. However, the Bitcoin miner has moved to dismiss the lawsuit seeking the funds invested by Sam Bankman-Fried’s hedge fund before the FTX empire collapsed. Genesis Digital emphasized that the claims are misguided and jurisdictionally barred.
According to Genesis Digital, the Cypriot company, headquartered in Dubai, does not have a U.S. office and should, therefore, not be required to defend claims asserted in the U.S. Bankruptcy Court for the District of Delaware by a trust for FTX. However, the FTX Recovery Trust is attempting to circumvent the jurisdictional issue.
The Recovery Trust sued Genesis Digital, claiming that former FTX CEO Sam Bankman-Fried used misappropriated funds from his Alameda Research hedge fund to invest in the mining company ahead of FTX’s collapse. The trust described it as one of Bankman-Fried’s most reckless investments, involving “commingled” funds. It also claimed that the former FTX CEO paid far higher prices than what the company was actually worth.
The purchases took place between August 2021 and April 2022, and the funds allegedly came directly from FTX user accounts. The trust specifically names Genesis Digital’s founders, Marco Krohn and Rashit Makhat, in the complaint.