The bankrupt cryptocurrency exchange FTX will begin its long-awaited creditor distributions. The reorganization plan, approved by a U.S. court, sets the stage for repayments to begin within 60 days of the effective date. FTX has engaged Kraken and BitGo, two prominent firms with expertise in crypto asset recovery, to assist with the repayment process. Both cash and digital assets, such as stablecoins, will be used for payouts, depending on the recipient’s preference and regulatory considerations.
FTX’s $16.5B Repayment Plan Set For January 3, Initial Payouts Within 60 Days
— The Wolf Of All Streets (@scottmelker) December 16, 2024
FTX announced it will begin repaying creditors and customers in early 2025, following the approval of its reorganization plan effective January 3, 2025. Initial repayments, facilitated by Kraken and… pic.twitter.com/psmxAozhd9
This marks a significant development for FTX creditors, who have been waiting for a resolution since the exchange’s collapse in late 2022. The bankruptcy, which was accompanied by allegations of fraud and mismanagement, resulted in the loss of billions of dollars in user funds. FTX founder Sam Bankman-Fried is currently serving a 23-year prison sentence, while the new leadership is working to rebuild trust and recover assets.
The creditor distribution process comes after FTX’s Chapter 11 bankruptcy plan was approved in October 2024, receiving overwhelming support from creditors, with 94% in favor. According to the approved plan, eligible creditors are expected to recover up to 118% of their claims, a positive outcome given the scale of FTX’s financial troubles.
John J. Ray III, the CEO of FTX Debtors, called the plan a milestone, emphasizing the two years of recovery efforts that have helped secure billions in assets for repayment. However, creditors will need to take several steps before receiving payments, including logging into the FTX portal, undergoing KYC (Know Your Customer) verification, filing necessary tax forms, and creating accounts with Kraken or BitGo. Only registered claim holders as of January 3, 2025, will be eligible for distributions.
In a related update, FTX has redeemed 178,631 Solana (SOL) tokens, with $1.1 billion still staked. The recent surge in Solana’s price, which has risen by 3.50% in the past day and 3.55% over the past week, further highlights the ongoing developments within the crypto space.
With creditor repayments set to begin soon, FTX’s reorganization plan offers a glimpse of hope for those affected by the exchange’s downfall, signaling a step forward in the recovery of assets and the restoration of the platform’s credibility.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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