The bankruptcy cryptocurrency exchange FTX’s reorganization plan officially went into effect on January 3, allowing customers to begin receiving repayments.
The FTX Debtors Plan of Reorganization is effective today, January 3, 2025. Today is also the initial distribution record date for holders of allowed claims in the Plan's Convenience Classes. Separate record and payment dates for other classes of claims will be announced later.
— FTX (@FTX_Official) January 3, 2025
However, FTX debtors have warned users about the increased risk of phishing scams, urging them to remain cautious when responding to emails that claim to be from the exchange.
Customers must submit claims for reimbursements
Under the reorganization plan, users seeking repayment must submit claims through FTX’s official platform. The deadline to file claims is 60 days from January 3. Those who meet the criteria are expected to receive funds within the same 60-day days.
The plan prioritizes a category known as “convenience classes,” which includes users with claims of $50,000 or less. These customers are expected to receive repayments sooner. According to FTX’s repayment framework, 98% of eligible users will likely recover 119% of their declared funds, calculated based on the exchange’s holdings during its bankruptcy filing in November 2022.
FTX users criticize the valuation approach
Despite the repayment timeline, the reorganization plan has faced criticism from some FTX creditors. A key point of contention is the decision to base reimbursements on cryptocurrency values at the time of the bankruptcy. Bitcoin’s price, for example, has increased by over 400% since November 2022, surpassing $98,000 at the time of publication. Some creditors argue this valuation method does not account for the current market realities, leaving them with a lower recovery amount than anticipated.
While repayments are underway, the legal fallout from FTX’s collapse continues. Among the executives implicated in the company’s failure, Sam Bankman-Fried, Caroline Ellison, and Ryan Salame have all received prison sentences, though Bankman-Fried is appealing his conviction. Gary Wang and Nishad Singh were the only senior executives to avoid prison time.
Recovery funds and support from other firms
In December, cryptocurrency companies BitGo and Kraken announced their involvement in the distribution of recovery funds to assist FTX in repaying its users. If all eligible creditors file valid claims, FTX is expected to distribute approximately $16 billion.
The repayment process represents a critical step in resolving the FTX bankruptcy case, which began in November 2022. However, as the distribution of funds moves forward, users are advised to stay alert to phishing schemes targeting those awaiting reimbursements.
The post FTX Reorganization Plan Begins as Users Warned About Phishing Risks first appeared on Coinfea.
