FTX Announces Chapter 11 Plan Effective January 3, 2025
The defunct cryptocurrency exchange FTX and its affiliated debtors announced that the court-approved Chapter 11 reorganization will take effect on January 3, 2025. This date serves as the record date for identifying eligible creditors for the Initial Distribution.
The Initial Distribution is anticipated within 60 days after the effective date, focusing on groups known as “Convenience Classes.” Other creditor categories will have their distribution timelines communicated later.
John J. Ray III, CEO of FTX, highlighted the efforts made over two years to recover substantial funds for customers and creditors. He encouraged those owed money to prepare for upcoming distributions, stating:
“For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point. The Plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of the recovery efforts. 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.”
FTX Partners with BitGo and Kraken for Creditor Payments
FTX has partnered with BitGo and Kraken to facilitate the distribution process for retail and institutional customers and other creditors. BitGo has provided trading and settlement services since 2013, while Kraken has operated as a major U.S.-based cryptocurrency exchange since 2011.
Eligible creditors must complete several steps to receive payments on the Initial Distribution date, including logging into the FTX Customer Portal, completing Know Your Customer (KYC) verification, submitting tax documentation, and onboarding with either BitGo or Kraken. Detailed instructions will be available on the FTX Customer Portal.
Additionally, FTX cautioned customers about phishing emails that may appear to originate from the FTX Debtors, along with scam sites. They reiterated that FTX will never ask for sensitive information or request customers to connect their wallets. FTX stated:
“Please remain aware of phishing emails that may look like they are from FTX Debtors and scam sites from channels that may appear to look like the FTX Debtors’ Customer Portal. This is another reminder that the FTX Debtors will never ask you to connect your wallets.”
FTX Digital Markets Ltd. will provide a separate process for customers who prefer the company to manage their claims. This reorganization plan signifies progress in returning funds to customers and creditors.