FTX announced that its reorganization plan officially took effect yesterday (January 3), and the initial distribution of repayments will be made within 60 days, targeting "convenience class" creditors with claim amounts below $50,000. To receive the initial repayment, creditors must complete the submission of tax forms and select and successfully register a distribution service provider by January 20. (Background: FTX announced the start of repayments in Q1 next year: payments will be made in stablecoins or fiat, with distribution handled by BitGO and Kraken) (Additional context: FTX announced the start of repayments in Q1 next year! How to confirm if the claim KYC is complete, and a complete guide to the required tax form submission steps) The bankrupt exchange FTX announced last December that its reorganization plan, approved by the court last October, will officially take effect on January 3, 2025, and the initial repayment distribution to creditors will occur within 60 days after this date. The initial repayment distribution is limited to creditors in the "convenience class" of the reorganization plan. The convenience class refers to creditors with claim amounts of $50,000 or below, representing over 90% of all creditors in the FTX bankruptcy case, and it is expected that they will be able to recover 118% of the claim value in USD. The distribution dates for other classes of claims will be announced later. The FTX Debtors Plan of Reorganization is effective today, January 3, 2025. Today is also the initial distribution record date for holders of allowed claims in the Plan's Convenience Classes. Separate record and payment dates for other classes of claims will be announced later. — FTX (@FTX_Official) January 3, 2025 Complete steps by 1/20 Today, the official announcement of the reorganization plan's effectiveness was made, reminding that to receive the initial repayment distribution, creditors in the "convenience class" must complete the pre-distribution requirements by January 20, 2025. This includes submitting tax forms (Step 7), selecting and successfully registering a distribution service provider (Step 8), and passing the sanctions review. The complete steps are as follows: Log in to the FTX claims portal (https://claims.ftx.com) (for customers). Complete the required KYC verification before January 3, 2025. (Please see the claims application guide on Dongqu) Submit the required tax forms, including the W-8 BEN form. (Please see the tax form submission guide on Dongqu) After selecting the distribution service provider BitGo or Kraken in STEP 8, read the registration instructions for the selected provider and register an account with BitGo or Kraken before January 20. The official stated that creditors who do not complete the requirements by the deadline will not be able to receive distributions on the initial distribution date, but may receive a subsequent payout in later months. Additionally, according to Article 7.8 of the reorganization plan, if a holder does not complete the pre-distribution requirements within 6 months from the initial distribution record date (January 3, 2025), they will lose their distribution rights. Meanwhile, under Article 7.14, if a holder receives a request to complete the requirements, they must do so within the specified deadline; otherwise, they will also lose their eligibility for distribution. FTX Claims Official Website How much compensation can creditors receive? According to FTX's bankruptcy plan, the company estimates that there will be between $14.5 billion and $16.3 billion in cash available for distribution. This plan applies to 98% of creditors, and the repayments are calculated based on the USD price of cryptocurrencies on the day FTX filed for bankruptcy under Chapter 11 on November 11, 2022. Although FTX expects that the vast majority of creditors (those with claims of $50,000 or below) will be able to recover 118% of the claim value in USD, unless the assets held by users on FTX are stablecoins, they are likely to incur significant losses. Bitcoin has surged over 500% since FTX's bankruptcy. For example, when FTX sought bankruptcy protection, the price of BTC was around $16,000; however, the current BTC price has soared to about $98,000. This means that if creditors held one Bitcoin on FTX at that time, they might only receive $16,000 back, which is about 16% of the current price, representing a significant loss. FTX repayments will inject $16 billion into the crypto market? Regarding the news of FTX's upcoming repayments, Quinten, co-founder of weRate, stated that this is a tremendous positive for the crypto market. He pointed out that FTX will start repaying creditors $16 billion from January 3 and is expected to complete the repayments within 60 days. Quinten believes that a significant portion of this capital may flow back into the cryptocurrency market, becoming fuel for a bull market. However, FTX's notable creditor Sunil immediately responded, clarifying that repayments will not begin on January 3. He indicated that the first repayments are expected to wait until February to March 2025 and will only target "convenience class" creditors, totaling $1.2 billion. For creditors with claims exceeding $50,000, a total of $10.5 billion will be paid subsequently. He further outlined FTX's total asset overview: Cash reserves: $13 billion Venture capital portfolio and lawsuit proceeds: estimated between $5 billion to $7 billion. Sunil added that about 50% of the claims have been purchased by claim buyers, but these buyers are not interested in crypto assets, which may reduce the likelihood of capital flowing back into the crypto market. FTX Claims distribution Repayments do not start today Jan 3rd Feb/Mar 25: $1.2bn: Convenience class paid within 60 days (119%) $10.5bn: Claims > $50k after Total FTX Cash = $13bn VC port/lawsuits: $5bn-$7bn Claim buyers: Bought 50% of claims - won't buy crypto pic.twitter.com/fHBzBckdcJ — Sunil (FTX Creditor Champion) (@sunil_trades) January 3, 2025 Related Reports Terrible! FTX Bitcoin users can only recover 18% (calculated at $16,000), current status two weeks after bankruptcy & claims...