FTX has scheduled its fifth creditor distribution for July 31, preparing to return nearly $900 million to eligible creditors as founder Sam Bankman-Fried's clemency campaign faces mounting political resistance. According to the latest announcement from FTX and the FTX Recovery Trust on July 17, the bankrupt exchange will distribute funds to creditors with approved claims in the Convenience and Non-Convenience Classes under its Chapter 11 reorganization plan. Claimants must have completed all pre-distribution requirements by the June 16 record date to qualify for payments. The company has named Kraken, Payoneer, and crypto custodian BitGo among the approved distribution providers handling the transfers. As reported by FTX, creditors should receive their cash within 1 to 3 business days after distribution begins.
The U.S. Senate unanimously approved a resolution declaring that FTX founder Sam Bankman-Fried should under no circumstances receive a presidential pardon or commutation. According to reports from The Times of India, the bipartisan measure, led by Senators Cynthia Lummis of Wyoming and Ruben Gallego of Arizona, passed by unanimous consent on July 15. The resolution underscores lawmakers' view of Bankman-Fried's role in what prosecutors called one of the largest financial frauds in U.S. history. As reported by The Times of India, Lummis stated that Bankman-Fried already had his day in court, while Gallego closed his statement with a blunt message saying he should remain in prison. The resolution represents lawmakers' hardening stance on accountability in the crypto sector as they seek to maintain strict oversight of the digital assets industry.
The latest distribution represents significant progress in creditor recovery, with Dotcom Customer Entitlement Claims receiving an additional 9%, bringing cumulative distributions to 105%. U.S. Customer Entitlement Claims will receive an additional 5%, also reaching 105% cumulative total. General Unsecured Claims and Digital Asset Loan Claims will each receive 3%, bringing their cumulative distributions to 103%. Convenience Claims have already achieved 120% cumulative distributions. The $900 million scheduled for July 31 will take announced distributions across FTX's second through fifth repayment rounds to at least $9.7 billion, excluding the initial February 2025 distribution to Convenience Class creditors. As reported by FTX, the smallest accounts get the most, achieving a full 120% recovery rate. Convenience claims below $50,000 are set to receive 120% of their allowed claim value under the recovery plan.
Despite the Senate's unanimous opposition, President Trump retains near-total authority to grant clemency to Bankman-Fried. According to legal analysis, Article II, Section 2, Clause 1 of the U.S. Constitution grants the president the power to grant clemency for offenses, except in impeachment cases. The Supreme Court has consistently held that this authority is beyond congressional reach, as established in the 1866 case Ex parte Garland, which states that "Congress can neither limit the effect of his pardon, nor exclude from its exercise any class of offenders." This constitutional framework means that while the Senate's resolution adds political pressure, it carries no legal weight in preventing Trump from granting clemency if he chooses to do so. The decision ultimately rests entirely with the White House, leaving the question of how far the industry's clemency streak will extend in the coming months.
While creditors await the latest payment, criminal cases tied to FTX continue even as the bankruptcy estate returns money to creditors. Last month, crypto.news reported that a federal judge rejected Michelle Bond's attempt to dismiss four campaign finance-related charges and scheduled her trial for November 9. In an order filed in the U.S. District Court for the Southern District of New York, Judge George Daniels rejected Bond's argument that prosecutors had promised not to charge her if her husband, former FTX executive Ryan Salame, pleaded guilty. The bankruptcy proceedings remain active with the court scheduled to hold omnibus hearings on July 23 and August 16. Bankman-Fried continues seeking a presidential pardon for his criminal conviction, serving a 25-year prison sentence after a federal jury found him guilty of fraud and conspiracy charges connected to the exchange's collapse. FTX has not set a date or size for the sixth payout, stating more details will come, and warns of scams, emphasizing it will never ask customers to connect a wallet.
