December 18, 2024
More than two months after a court approved former cryptocurrency exchange FTX’s reorganization plan to pay off its debts, the exchange has provided new details about the timeline for implementing the plan and the mechanism for distributing funds to creditors.To obtain an advertising service for crypto projects
FTX Reorganization Plan to Launch in January 2025
Last October, Judge Lewis Kaplan approved FTX’s reorganization plan, paving the way for the repayment process to be implemented. Despite this positive step, there have been many questions about how the plan will actually be implemented.
In an announcement on Monday, FTX confirmed that the plan will officially begin implementation on January 3, 2025. The first phase of distributing funds to eligible creditors will begin within 60 days of that date.
To ensure a smooth process, FTX has signed cooperation agreements with BitGo, a digital asset infrastructure solutions provider, and Kraken, a leading cryptocurrency exchange. The infamous exchange has indicated that it may sign other similar agreements to support the payment efforts.
John J. Ray III, Managing Director of FTX Debtors and the person in charge of the recovery process, expressed confidence in the success of the reorganization plan, saying:
“Over the past two years, our team has worked diligently and meticulously to recover billions of dollars to get to this point. The plan coming into effect in January 2025 reflects the significant efforts we have made to achieve this. We are now ready to distribute the recoveries to customers and creditors, and we urge them to take the necessary steps to receive their dues on time.”
Ongoing efforts to recover funds to pay creditors and return political donations are part of the process.
In parallel with the announcement of the start of repayment, FTX continued its relentless efforts to recover lost funds and provide the necessary liquidity to repay its debts. The exchange had taken a multi-pronged approach that included legal action and negotiations with relevant parties.
One of FTX’s most notable successes in this context was its recovery of $228 million after reaching a settlement with Bybit, with which FTX had a legal dispute. In addition, the latter filed a lawsuit against Binance. Claiming that the agreement signed between the two parties in 2021 could be considered void. If the court rules in its favor, the bankrupt exchange could recover up to $1.8 billion. Or reach a settlement similar to the one it reached with Bybit.
In addition to the legal action, FTX also aims to recover political donations made on behalf of the company by former executives, including former CEO Sam Bankman-Fried. The Biden administration recently worked to return these donations, which totaled $14.5 million. The exchange was able to recover a significant portion of them last week.
FTX’s reorganization plan marks a milestone in the journey to recover rights for its creditors. The exchange is taking rapid and effective steps to ensure it fulfills its obligations. Despite the significant challenges it faces, the exchange appears determined to achieve success in the repayment process and restore its reputation in the cryptocurrency market.
