December 17, 2024

Creditors representing cryptocurrency exchange FTX in the bankruptcy case announced that a reorganization plan, which paves the way for customers to recover their funds, will go into effect on January 3, 2025.

In a statement on December 16, FTX confirmed that it has set a timeline for the initial distribution of funds to exchange users, more than two years after it filed for Chapter 11 bankruptcy. According to creditors, the first group of claimants can expect to receive payments within 60 days of January 3, 2025, provided certain conditions are met.

The creditors confirmed that cryptocurrency companies BitGo and Kraken will help distribute the funds to FTX users. The statement indicated that other customer groups expecting to receive their funds will be announced later.

Commenting on the event, John Jay Ray III, CEO of FTX, said: “We are fully prepared to begin distributing funds to all clients and creditors, and we encourage clients to complete the necessary steps to ensure that distributions are received in a timely manner.”

FTX Story: Bankruptcy in 2022, Recovery in 2025

A bankruptcy judge approved the reorganization plan last October, allowing creditors to pay off 98% of the claimed user accounts, up to 119% of each account’s appraised value. Under the plan, “concessional categories” would be among the first to receive payments, including users claiming amounts of $50,000 or less.

“We are proud to support FTX in distributing the refund,” said Mike Belshe, CEO of BitGo. FTX’s customer claims statement indicated that a third, as-yet unnamed distributor will join BitGo and Kraken in this mission.

FTX filed for bankruptcy in the United States in November 2022, after experiencing a liquidity crisis and the resignation of then-CEO Sam Bankman-Fried. The case resulted in a series of indictments against executives at FTX and Alameda Research, three of whom are currently serving prison sentences.

As legal battles over bankruptcy plans continue, FTX is seeking to recover money spent on political donations before its collapse. Creditors have already taken legal action to recover assets frozen by cryptocurrency companies, with the aim of using them to distribute the recovered funds.

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