Debtors representing the defunct cryptocurrency exchange FTX in its bankruptcy case have announced that a reorganization plan, which will enable customer repayments, will take effect on Jan. 3.
In a Dec. 16 notice, FTX said it had set up a timeline for the initial distribution of funds to the exchange’s users, more than two years after the firm filed for Chapter 11 bankruptcy protection. According to the FTX debtors, the first group of claim holders can expect repayments within 60 days of Jan. 3, 2025, subject to certain conditions.
The debtors said that crypto firms BitGo and Kraken would assist in distributing recoveries to FTX users. Other groups of customers expecting repayments “will be announced in due course,” according to the exchange.
“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,” said FTX CEO John J. Ray III.
FTX saga: Bankruptcy in 2022; repayments in 2025
A bankruptcy judge approved the FTX reorganization plan in October, allowing debtors to repay 98% of users roughly 119% of their claimed account value once it was effective. According to the plan, the “convenience classes” will be among the first to receive repayments, including users claiming $50,000 or less.
BitGo CEO Mike Belshe said the firm was “proud to support FTX” by assisting in distributing recovery funds. According to the FTX customer claims portal, there will be a third distributor — unnamed at the time of publication — in addition to BitGo and Kraken.
Related: FTX filed for bankruptcy 2 years ago — What’s happening now?
FTX filed for bankruptcy protection in the United States in November 2022, shortly after the exchange’s liquidity crisis and the resignation of then-CEO Sam Bankman-Fried. The case resulted in several indictments against FTX and Alameda Research executives, three of whom — including Bankman-Fried — are serving years in prison.
Amid parties engaging in legal battles over proposed bankruptcy plans, FTX has been attempting to claw back funds made for political contributions before the firm collapsed. The estate’s debtors have already taken legal action against crypto firms that locked assets tied to FTX — funds that could be used for recovery distributions.
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