Court-approved repayments, expected to recover up to 118% of claims, reflect significant asset recovery efforts, offering hope for affected investors.
Starting January 3, 2025, FTX, the bankrupt cryptocurrency exchange, announced its reorganization plan will take effect. Under this plan, creditor distributions are set to begin within 60 days of the effective date. Kraken and BitGo, firms with extensive expertise in crypto asset recovery, have been engaged to facilitate the repayment process.
Payments will be made in cash or digital assets like stablecoins, depending on the recipient's preference and regulatory guidelines. In a tweet, community member Scott Welker provided additional perspective:
Initial repayments, facilitated by Kraken and BitGo, will prioritize creditors with claims under $50,000, comprising over 90% of all creditors, with distributions expected within 60 days. Creditors will receive U.S. dollar values of their crypto holdings based on November 2022 prices.
This reinforces the awaited resolution previously discussed in a CNF update, where FTX creditors anticipated repayments resuming in January 2025. Another community member highlighted on X platform:
What happens when FTX Official investors get access to $16.5 billion in USD? A lot of investors may buy Bitcoin and altcoins subsequently.
FTX's Chapter 11 bankruptcy plan, approved in October with 94% creditor support, outlines how claims will be addressed. Eligible creditors are expected to recover up to 118% of their claims. John J. Ray III, CEO of FTX Debtors, hailed the plan as a milestone, crediting two years of recovery efforts for securing billions in assets for repayment.
To receive distributions, creditors must complete specific steps, including logging into the FTX portal, undergoing KYC, filing tax forms, and creating accounts with Kraken or BitGo. Payments will only be made to registered claim holders as of January 3, 2025.
FTX's reorganization follows its collapse in late 2022 amid allegations of fraud and mismanagement. Founder Sam Bankman-Fried is currently serving a 23-year prison sentence, while the new leadership continues efforts to restore trust and recover assets.