FTX claimants could receive recovery payments as early as January 2025, marking a key milestone two years after the crypto exchange’s collapse.
FTX Sets Payment Timeline for Claimants
Debtors managing FTX’s bankruptcy case have finalized a reorganization plan, with a major step set to take effect on January 3, 2025. According to a notice issued on December 16, FTX’s first group of claimants may begin receiving payments within 60 days of the effective date.
The repayment process will be facilitated by prominent crypto firms BitGo and Kraken, which are assisting in distributing funds to affected users. An additional third party will also aid the process, although their name has not yet been disclosed.
FTX CEO John J. Ray III expressed optimism about the progress:
“We are well positioned to begin executing the distribution of recoveries back to all customers and creditors, and encourage customers to complete the necessary steps to begin receiving distributions in a timely manner.”
Key Highlights of the FTX Repayment Plan
- Timeline: Initial repayments will begin within 60 days of January 3, 2025.
- Eligibility: The first group to receive payments includes claimants classified under the “convenience class” (users with claims of $50,000 or less).
- Repayment Percentage: Approved in October 2024, the plan ensures 98% of claimants recover approximately 119% of their claimed account value.
BitGo CEO Mike Belshe affirmed the company’s commitment to supporting FTX customers through this recovery process.
FTX Bankruptcy: From Collapse to Recovery
FTX’s downfall began in November 2022 following a liquidity crisis and the resignation of its founder and former CEO, Sam Bankman-Fried. This triggered a Chapter 11 bankruptcy filing in the United States and led to several legal battles.
Key developments include:
- Executives Indicted: Multiple executives from FTX and Alameda Research, including Sam Bankman-Fried, faced legal consequences. Bankman-Fried and two others are currently serving prison sentences.
- Clawback Efforts: FTX has been actively recovering funds used for political contributions and locked assets tied to other crypto firms. These recovered funds will contribute to repayment distributions.
