FTX Bankruptcy, Explained. What happened and will you get your money back.

What happened to FTX

If your money is stuck on FTX, you are not alone: the money of millions of other people, including customers in dozens of countries, is stuck too. The exchange collapsed in a matter of days: customer funds were not on the exchange at all; they had been moved to an affiliated company. Withdrawals were halted, FTX filed for bankruptcy on November 11, 2022, and user funds were frozen. Here is what actually happened and what it means for your claim.

The short answer to "what happened to FTX": the exchange spent customer money, could not return it on demand, and declared itself bankrupt. From that point on, the fate of the funds is controlled not by the exchange but by a U.S. bankruptcy court.

The scale was enormous: the shortfall ran into billions of dollars, and the people affected were millions of customers worldwide. It is important to understand that this was not a "hacker theft" but the company's own misuse of customer funds. So the money did not vanish without a trace: a large share of the assets has been found and gradually returned to the common pool used to pay creditors.

What Chapter 11 Means in the FTX Bankruptcy

FTX filed for Chapter 11 bankruptcy. This process lets a company address creditors' claims through a court-approved plan. It does not mean the exchange has to reopen: a Chapter 11 plan can also provide for liquidation. See the U.S. Courts guide to Chapter 11.

What Is an FTX Bankruptcy Claim?

An FTX bankruptcy claim is a creditor's right to seek payment from an FTX company in the bankruptcy case. For a customer, it concerns the funds owed after the exchange stopped withdrawals.

“Pursuant to 11 U.S.C. § 502(c), the Court estimates for the purposes of solicitation, voting and distribution, the value of Claims based on Digital Assets … to be based on the values set forth in the Digital Assets Conversion Table attached hereto as Exhibit 1.”

- Judge John T. Dorsey, Order Granting Motion of Debtors to Estimate Claims Based on Digital Assets, D.I. 7090, February 7, 2024

Your claim is a fixed dollar figure based on the court's table of crypto prices from November 2022, not on today's prices.

FTX claims differ by debtor, class and status. A claim number identifies a record; it does not by itself mean the amount has been finally accepted in the case (“allowed”). The Bankruptcy Code's definition of a claim also covers disputed and contingent claims. See our guide to FTX claim classes for the plan categories.

What Can You Do With an FTX Claim?

1. Check your status. For customer claims in the U.S. bankruptcy case, open the official FTX Customer Claims Portal and review your claim record and any outstanding steps. Qredax does not operate the portal.
2. Compare offers. Our FTX claim value guide explains what to look at when assessing a sale price.
3. Consider selling. To sell your FTX claim, request an individual offer from Qredax. A sale depends on the claim review and agreed contract terms.

Will FTX money come back - and when

The question every holder asks: "will FTX money come back and when are the FTX payouts?" The good news - payouts are no longer a promise but a fact. The payer is not the exchange itself but the FTX Recovery Trust: a structure created under the bankruptcy plan specifically to pay creditors. There is a detailed piece on what the FTX Recovery Trust is.

“As of the July 31, 2026 distribution, all allowed and estimated allowed interest bearing claims have now received, or otherwise been reserved for, greater than or equal to a 100% cumulative recovery.”

- FTX Recovery Trust Financial Report Q2 2026 (Unaudited), D.I. 36154, August 17, 2026

Every allowed claim that earns interest has now been paid, or had cash set aside for, at least its full allowed amount.

How much has already been paid

Payouts go out in distributions (waves) starting in early 2025:

• Distribution 1 - about $454 million (FTX Recovery Trust report, D.I. 30424), February 2025: small claims, the Convenience Class, went first;
• Distribution 2 - about $5 billion, May 30, 2025;
• Distribution 3 - about $1.6 billion, September 30, 2025;
• Distribution 4 - about $2.2 billion, March 31, 2026;
• Distribution 5 - about $900 million, July 31, 2026.

In total, more than $10 billion has already gone back to creditors. The fifth distribution took place on July 31, 2026 (record date June 16, 2026); the Recovery Trust distributed approximately $900 million. The full timeline is in our FTX payout schedule for 2026.

How much each class gets

The FTX announcement of July 17, 2026 gives the following cumulative distributions for the July 31, 2026 round, subject to eligibility. These are not additional payments still due or confirmation of an individual creditor's receipt.

Do not compare these cumulative percentages directly with a purchase offer for the rights you still hold. Earlier distributions and the rights being transferred matter. The table is a dated distribution snapshot, not a projection of final recovery. Our guide to FTX claim interest explains the interest component separately.

The drawback: claim amounts use November 2022 prices

What happened to FTX's founder

FTX's founder was convicted of fraud and on March 28, 2024 sentenced to 25 years in U.S. prison. This no longer affects the repayment process itself: the payouts are run by the independent administrator and the FTX Recovery Trust, not the exchange's former leadership.

The U.S. Court of Appeals for the Second Circuit denied the appeal on June 12, 2026 (US v. Bankman-Fried, No. 24-961) and issued its mandate on August 4, 2026. A petition to the U.S. Supreme Court is still possible, but it would not change the distribution process.

Why the money comes back over years, not at once

Many people are frustrated that payouts arrive in waves spread across 2025-2027 rather than in one go. The reason is that FTX's assets were scattered and hard to turn into cash: not dollars sitting in an account, but equity stakes in startups (including AI companies), real estate, tokens, and lawsuits to recover money from parties the exchange had overpaid. All of this first has to be found, valued, sold or litigated - and only then distributed to creditors. Each distribution is a fresh batch of recovered, court-approved money. That is why the process moves in waves, and the timing of your own payout depends on your claim class and on when the next distribution is ready.

If you hold an FTX claim in a restricted jurisdiction

For holders in Russia, Belarus and Ukraine, however, payouts face a practical obstacle: as of October 1, 2026, FTX's eligibility page lists Russia, Belarus and Ukraine as not eligible for distributions, so their residents cannot choose a payout provider (Distribution Service Provider, or DSP) and payment is deferred. KYC verification problems are a separate issue, covered in our guide on KYC problems for CIS creditors.

If waiting several years for full repayment is not an option, a claim can be sold now for a fixed amount in USDT, as explained in our guide for holders from Russia, Belarus and Ukraine. To see what your claim is worth today, use the free valuation.

What to know before selling a claim

If you are weighing a sale, keep a few things in mind. First, the claim amount is fixed at November 2022 prices: that is the base both for the future payout and for any sale price, and today's crypto rate no longer changes it. Second, for creditors outside the US the key risk is KYC: if verification in the claims portal stalls, full repayment can take several years, which is exactly why many people choose to sell the claim now rather than wait for every distribution. Third, a claim sale is done through an assignment-of-claim agreement, and this is where to be careful: check who you are transferring the claim to and on what terms, whether there is a clear written contract, and whether the transfer is recorded on Kroll's official claims register. A legitimate deal asks for no upfront payment and never asks you to send money to personal wallets. The same factors that drive the payout (claim class, KYC status and jurisdiction) also set what your claim is worth on the market today. So a sensible first step is simply to learn its current valuation.

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