The bankruptcy liquidation team of the already bankrupt cryptocurrency exchange FTX announced today that the bankruptcy plan approved by the U.S. court will take effect on January 3, 2025, and the initial repayment distribution for creditors with claims of $50,000 or less will be completed within 60 days of that date. (Background: FTX announces repayment to start in Q1 next year! How to confirm if claim KYC is completed, and a complete guide on submitting required tax forms) (Supplementary background: Tragic! FTX Bitcoin users can only recover 18% (calculated at $16,000), current status two weeks after bankruptcy and claim progress?) After two years of bankruptcy reorganization proceedings, the liquidation team of FTX, which declared bankruptcy in November 2022, announced today (17th) that the bankruptcy plan approved by the court this October will officially take effect on January 3, 2025, and the first distribution of initial repayments to creditors will occur within 60 days after that date. FTX announced that the initial repayment distribution is limited to creditors who belong to the 'Convenience Class' in the bankruptcy plan. The Convenience Class refers to creditors with claims of $50,000 or less, which account for over 90% of all creditors in the FTX bankruptcy case. The dates for distributing claims from other classes will be announced at a later appropriate time. The FTX Debtors today announced that the effective date for its Plan of Reorganization has been set for January 3, 2025, which is also the initial distribution record date for holders of allowed claims in the Plan’s Convenience Classes. Read more here: https://t.co/7Hggm5cTlS — FTX (@FTX_Official) December 16, 2024 FTX partners with BitGO and Kraken to handle customer repayment distribution. Notably, FTX also announced that it has reached agreements with two companies, BitGo and Kraken, which will serve as third-party distribution service providers to assist FTX in distributing repayments to customers and other creditors according to the bankruptcy plan. BitGo is a globally regulated cryptocurrency custodian, while Kraken is a well-known cryptocurrency exchange in the United States, offering spot and derivatives services in up to 190 countries/regions. The two companies have now appeared on the FTX claims official website in STEP 8, which also shows that there will be a third partnered repayment distribution service provider (the name has not yet been announced as of the time of writing). Payment methods include fiat currencies and stablecoins. Currently, the FTX claims official website has added STEP 8, where creditors need to select a distribution service provider (Distributions Services Provider) in this step. The website also indicates that the repayment distribution payment methods from BitGo and Kraken include stablecoins and fiat currencies, with different transaction fees for the two payment methods at each company. However, both are stablecoins priced below fiat currencies. Source: @sunil_trades FTX claims application requires completion of necessary steps. Finally, FTX also reminds that in order to qualify for the repayment distribution on the initial distribution date, customers and other creditors must complete the following actions before January 3: Log in to the FTX claims portal (https://claims.ftx.com) (for customers). Complete the required KYC verification. (See the FTX claims application guide from the news outlet) Submit the required tax forms. (See the tax form submission guide from the news outlet) After selecting the distribution service provider BitGo or Kraken in STEP 8, read the registration instructions for the selected service provider and create an approved account on BitGo or Kraken before January 3. Further reading: FTX announces repayment to start in Q1 next year! How to confirm if claim KYC is completed, and a complete guide on submitting required tax forms. How much compensation can creditors receive? According to the FTX bankruptcy plan, the company estimates that there will be up to $14.5 billion to $16.3 billion in cash available for distribution. This plan applies to 98% of creditors, with repayments calculated based on the dollar price of cryptocurrency on the day FTX filed for Chapter 11 bankruptcy on November 11, 2022. Although FTX expects that the vast majority of creditors (those with claims of $50,000 or less) will be able to recover 118% of the value of their claims in USD, unless the assets users held at FTX are stablecoins, it is likely that they will still incur significant losses. Bitcoin has surged over 564% since FTX's bankruptcy. For example, when FTX filed for bankruptcy protection, the price of BTC was around $16,000, but the current BTC price has soared to $106,272. This means that if a creditor held one Bitcoin at FTX at that time, they might only recover $16,000, which is only about 15% of the current price, resulting in a significant loss. Related reports: FTX repayment guide: 98% of creditors receive 118% in cash, repayment timeline, how much capital will return to the market? FTX creditors can only recover 10-25% of cryptocurrency assets: the rising Bitcoin is increasingly heartbreaking... The earliest repayment in Q4. Judge approves: FTX starts $16 billion repayment (creditors receive an additional 18% interest), Bitcoin returns to bull market countdown? "FTX will initiate its first repayment in Q1 next year: payments will be made in stablecoins or fiat currencies, distributed by BitGO and Kraken" This article was first published on BlockTempo (the most influential blockchain news media).

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