FTX sets January 3, 2025, as effective date for initial distributions to creditors

Key Takeaways

FTX will begin creditor distributions on January 3, 2025, subject to court approval.
98% of creditors under the FTX plan will receive at least 118% of the value of their claim.

FTX is expected to begin creditor distributions on January 3, 2025, after receiving court approval for its Chapter 11 reorganization plan, according to Monday. press release.

The entity plans to start the first round of payments within 60 days from the effective date, subject to KYC and other distribution requirements. This initial distribution will be limited to certain credit groups (“Resource Classes”) as defined in the plan.

The FTX estate has selected BitGo and Kraken to manage distributions to retail and institutional customers in supported jurisdictions. Kraken is also among five exchanges announced to offer Mt. Gox to handle.

Both BitGo and Kraken confirmed that they will be help with the repayment process according to the approved reorganization plan.

“For the past two years, our team of professionals has worked carefully and efficiently to recover billions of dollars to reach this point,” said John J. Ray III, Chief Executive Officer of FTX Debtors. “The Plan comes into effect in January 2025 and the start of emissions is a reflection of the success of recovery efforts.”

To receive releases, creditors must first log into the FTX Debtors Customer Portal, complete KYC verification, and submit the required tax forms. Creditors must then choose BitGo or Kraken to manage their distribution. Instructions for onboarding each platform will be provided on the FTX Debt Customer Portal.

The FTX reorganization plan, which guarantees that 98% of creditors will receive at least 118% of the value of their claim in cash. approved by a US judge in early October. Total recovered funds are estimated to be between $14.7 billion and $16.5 billion, obtained from liquidated assets of FTX, international branches, government agencies, and cooperative parties.

K33 analysts estimate approx $2.4 billion can be reinvested in the crypto markets after the implementation of the plan. While those with approved claims under $50,000 will receive reimbursements within 60 days of the effective date, larger claims may take until mid-2025 to be fully resolved.

The analysts note that $ 3.9 billion of total applications were purchased with credit money, which is unlikely to enter the crypto market. Additionally, 33% of the remaining claims are owned by licensed countries; Insiders, or individuals without KYC verification may not be able to claim funds.