FTX and the group of its affiliated debtors have reached a definitive date for the distribution of refunds to the parties affected by the collapse of the exchange.
In compliance with the Chapter 11 reorganization plan approved in court, it was announced that payments will occur from January 3, 2015, onwards.
The money will be returned to creditors in stablecoin, with the platforms Kraken and BitGo facilitating the process.
The news is highly bullish for the cryptocurrency market and could help fuel the Christmas rally.
All the details below.
The FTX saga is about to come to an end
Over 2 years after the disappearance of the cryptocurrency exchange FTX, refunds to creditors are finally arriving, marking the end of this terrible saga.
In November 2022, the first turbulences had begun after some concerning details were discovered regarding the balance sheets of the partner company Alameda Research.
Complicit in a liquidity crisis and a customer exodus amplified by the intervention of Binance, FTX entered bankruptcy by invoking the Chapter 11 bankruptcy code.
In the following months, the exchange was managed by the restructuring company “Kroll Restructuring Administration LLC”, which attempted to recover as many funds as possible for the reimbursements to clients.
To do this, the trustee in question has initiated numerous legal actions, such as a lawsuit against KuCoin and Crypto.com to recover millions of dollars in assets.
From that point on, thanks also to a recovery of the crypto market that re-evaluated the exchange’s balance sheet, the debtors recovered a large part of the lost sum.
On October 7, 2024, after a long wait, the bankruptcy plan of FTX was announced by a court, which allowed the return of 16.5 billion dollars to the damaged customers.
In the meantime, Sam Bankman Fried, CEO of the disgraced exchange, has been sentenced to 25 years in prison, marking a crucial moment in the crypto landscape.
Now we have reached the end credits, with the creditors about to receive the long-awaited refunds, even if they will hardly forget this long story.
Refunds for creditors of the FTX exchange starting from January 3
On December 17, FTX along with the group of affiliated debtors announced the refund distribution plan that will begin on January 3, 2025.
This plan, the result of months of negotiations, aims to return funds to clients using stablecoin, cryptocurrencies pegged to fiat currencies like the US dollar, to ensure stability.
Several classes of convenience are expected to determine the priority of payments, given the large number of subjects affected by the bull and bear case.
The trustee has also negotiated agreements with government agencies such as the CFTC and the IRS to prioritize refunds to clients over fines and tax debts
According to FTX, the first group of creditors can expect repayments within 60 days from January 3, 2025.
In particular, all former clients of the exchange with deposits up to 50,000 dollars will be liquidated within this time frame.
Registration and payment dates separate for other classes of credits will instead be announced in the future in due course.
The CEO of FTX John J. Ray III has publicly revealed that the entire refund machine has been started, and shortly the first payments will be initiated.
Here are his words regarding the news:
“In the last two years, our team of professionals has worked meticulously and efficiently to recover billions of dollars to reach this point. The implementation of the plan in January 2025 and the start of distributions are a reflection of the exceptional success of the recovery efforts. We are well positioned to begin executing the distribution of recoveries to all clients and creditors and encourage clients to complete the necessary steps to start receiving the distributions in a timely manner”.
The FTX refund plan involves the participation of the exchanges Kraken and Bitgo
The FTX refund plan involves the participation of the cryptocurrency exchanges Kraken and BitGo, selected to facilitate the distribution of the assets.
Users will be able to rely on their professionalism and security internally, given the previous experience gained in the cryptographic sector.
To qualify for the initial distribution, creditors must now access the claim portal of FTX, completing the KYC verification and submitting the required forms. Then they must register with kraken and BitGo. FTX debtors will soon provide precise instructions for onboarding with each of the service providers.
All creditors will be able to choose whether to be reimbursed via a transfer in USD or in the form of stablecoin directly on the exchanges mentioned above.
Emphasis on how a 21-day objection period must pass without disputes before refunds are actually processed.
Further updates on reimbursements for other groups of creditors are expected in the coming months, which will likely see them being repaid in other ways.
In total, it is estimated that about 98% of the refund requests by the creditors will be completed, thanks to the rapid recovery of FTX funds by the Trustee.
How the news could positively impact the markets
As many users on X point out, the news of FTX refunds has a potentially bullish background for the entire crypto market.
The eligible users will receive money in the form of FIAT money or stablecoin, which can be used to purchase new crypto coins.
In the first phase of FTX’s restructuring plan, about 98% of creditors will receive at least 118% of the value of their credit. The recovered funds are estimated between 14.7 billion and 16.5 billion dollars
In a highly bull context with Bitcoin that has recently reached 107,000 dollars, the creditors of FTX want to recover from the bad incident of 2 years ago.
These people have seen their funds momentarily decrease with BTC just above 15,500 dollars and now have a strong speculative opportunity in the air.
It is likely that they will decide to use at least a part of the refunds to go shopping for altcoin in the crypto market, fueling the rally currently underway.
As stated by the expert “AshCrypto”, new liquidity is about to enter the crypto exchanges, likely creating the conditions for a new bullish leg up.
We are expecting a first quarter 2025 of fire!
BREAKING
FTX TO ALLOW BANKRUPTCY
PAYOUTS IN STABLECOINS VIA
KRAKEN AND BITGO
MORE LIQUIDITY WILL ENTER THE
CRYPTO MARKET SOON 
pic.twitter.com/UDFBDxrdf1
— Ash Crypto (@Ashcryptoreal) December 17, 2024