More than two years after filing for bankruptcy in November 2022, FTX has confirmed that its Chapter 11 restructuring plan will officially take effect on January 3, 2025. The first round of distributions to creditors is expected to occur within 60 days of this effective date, marking a major milestone in the recovery process.

Distribution Roadmap and Conditions

FTX has partnered with BitGo and Kraken to facilitate the repayment process. Creditors in the initial eligible group must meet the following requirements:

  • Complete their tax documentation.

  • Register an account with BitGo or Kraken.

For assigned claims, payments will only be made to the officially registered transferee as of January 3, 2025. Additionally, a 21-day objection period must pass without disputes before distributions are processed. Creditors will have the option to receive repayments via USD wire transfers or stablecoins.

Asset Recovery Efforts

To secure funds for repayment, FTX has pursued multiple legal actions, including a lawsuit against Gate.io to recover $40 million in crypto assets. Reports confirm that at least $35 million has already been returned to FTX-controlled wallets. FTX has also initiated legal proceedings against Binance and former CEO Changpeng Zhao to recover $1.8 billion, allegedly misappropriated during Sam Bankman-Fried's leadership.

Market Reaction

Following the announcement, FTX’s native token, FTT, surged by nearly 10%, reaching its highest level in 10 months. However, FTT still remains 96% below its all-time high from 2021.

Closing a Turbulent Chapter

The court-approved plan allows FTX to repay approximately 98% of creditors' claims. Notably, creditors with claims under $50,000 will be prioritized in the first round of distributions. With these developments, 2025 is set to mark a resolution for those affected by FTX’s collapse.

The restructuring process not only signifies the conclusion of one of the largest scandals in crypto history but also serves as a stark reminder to the industry of the importance of transparency and risk management.

$FTT