The FTX estate has announced it will begin reimbursing users by March. According to a statement on Thursday, the firm expects its bankruptcy and reorganization efforts will likely wrap up early next year, “paving the way for FTX to begin creditor and customer distributions.”
“The timeline laid out reflects the experience and continued work of the team of professionals supporting the Debtors, who already have recovered billions of dollars on behalf of FTX's creditors and customers,” FTX CEO John J. Ray III said in a statement.
By the end of December, FTX plans to make arrangements with its “specialized distribution agents” to send the funds and be in a position to announce the “exact effective date.”
FTX said that in order to be eligible to receive recoveries, customers must create an approved account with a distribution agent, complete KYC verification and submit required tax forms before the initial distribution date,
The estate previously said it expects to repay FTX customers between 129% and 146% of their claims value in fiat terms at the time of its bankruptcy. While appearing like a full recovery, many creditors argue the exchange should repay customers with crypto in kind, considering that the market value of nearly every crypto asset has gone up since the exchange collapsed in late 2022.
The restructuring team previously said there was “overwhelming preliminary support from all classes of creditors” and that over two-thirds of all solicited claims by voting value participated in the solicitation process, The Block previously reported.
FTX owes customers around $8 billion. In April, it was disclosed that CEO John Jay Ray was paid $1,575 an hour.
The bankrupt exchange says the IRS is requesting $24 billion in back taxes, more than three times the amount the estate currently has to try and make creditors whole.
Former FTX CEO Sam Bankman-Fried was found guilty of seven criminal counts, including two counts each of wire fraud and conspiracy to commit wire fraud, and was sentenced to nearly 25 years in prison.
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