FTX Confirms Creditor Repayments Will Begin on January 3, 2025
FTX has confirmed that its Chapter 11 reorganization plan will take effect on January 3, 2025, with repayments to creditors expected within 60 days. The company is collaborating with BitGo and Kraken for the distribution process, providing a path for those affected by its collapse.
Eligible creditors must submit tax documentation and register with either BitGo or Kraken to receive funds. Payments will go to the official transferee listed as of January 3 if claims were transferred. A 21-day period will allow for objections before distributions commence. Further updates for other creditor groups are anticipated in the coming months.
Creditors can opt for repayments via USD wire transfer or stablecoins. Much of the repayment funds stem from legal actions against other platforms. FTX recently recovered $35 million from Gate.io after pursuing a lawsuit for $40 million in crypto assets. Additionally, FTX is seeking $1.8 billion from Binance and its former CEO Changpeng Zhao for allegedly misappropriated funds.
Following these announcements, FTX’s native token, FTT, increased by nearly 10%, reaching its highest value in 10 months. A similar price rise occurred in November when the reorganization plan received court approval. However, FTT remains 96% below its all-time high from 2021, indicating the long-term effects of the exchange's collapse.
FTX’s reorganization plan, approved by the bankruptcy court in October, aims to repay about 98% of creditor claims, including users in the "convenience class" with claims under $50,000. These smaller creditors are expected to be among the first to receive repayments once the plan is implemented.
The downfall of FTX began in November 2022 due to a liquidity crisis and the resignation of founder Sam Bankman-Fried. Earlier this year, Bankman-Fried was sentenced to 25 years in prison for fraud. His associate Caroline Ellison, former CEO of Alameda Research, received a reduced sentence of 24 months for cooperating with prosecutors, while co-founder Gary Wang avoided jail time entirely for his assistance to authorities.
In a related development, the US government transferred $33.6 million in crypto seized from FTX to various wallets earlier this month, raising speculation about a potential sell-off.
FTX’s reorganization represents a significant step toward closure for creditors, as the company actively recovers assets for distribution. This two-year saga is nearing its conclusion, offering some relief to those who lost funds during the exchange's collapse.