In the latest announcement, the defunct crypto exchange, FTX and its affiliated debtors have announced their reorganization plan will take effect on January 3, 2025, opening doors for initial creditor distribution within 60 days. The announcement shows major progress in the company’s recovery process following its collapse in November 2022.
FTX’s Roadmap to Ensure Smooth Disbursements
To ensure the smooth distribution of recoveries to both retail and institutional creditors, FTX has joined hands with Kraken and BitGo. These firms will manage secure and efficient disbursements across supported jurisdictions, with the option for creditors to receive funds in stablecoins.
The initial distribution will focus on creditors within the plan’s “convenience classes”. Separate timelines for other creditor categories will be announced via the company’s customer portal and verified communication channels.
John J. Ray III, Chief Executive Officer of the FTX Debtors, stated, “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.”
To qualify for the initial distribution, creditors must complete several prerequisites by January 3, 2025, including KYC verification, tax form submission, and onboarding with distribution partners.
Also, creditors with transferred claims must register their claims by the effective date and comply with a 21-day notice period to avoid objections.
The $16.5 billion recovery plan received approval from U.S. Bankruptcy Judge John Dorsey in October 2024. The value is expected to decline to $14.7 billion after cash conversion. Despite this, the plan strives to provide much-needed relief to FTX’s 9 million affected customers and investors.
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