Important points
FTX will begin making distributions to creditors on January 3, 2025, subject to court approval. 98% of creditors under FTX's plan will receive at least 118% of their claims.
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According to a press release on Monday, FTX plans to begin making distributions to creditors on January 3, 2025, following court approval of its Chapter 11 reorganization plan.
The company plans to begin making the first payments within 60 days of the effective date, subject to KYC and other distribution requirements. This initial distribution will be limited to a specific group of creditors (a “convenience class”) defined in the plan.
FTX Estate has selected BitGo and Kraken to manage distributions to retail and institutional customers in supported jurisdictions. Kraken is also among five exchanges designated to process Mt.Gox repayments.
Both BitGo and Kraken confirmed that they will assist with the repayment process in accordance with the approved restructuring plan.
“Over the past two years, our team of experts has worked meticulously and efficiently to recover billions of dollars to get to this point,” said FTX Debtors Chief Executive Officer. said John J. Ray III. “That the plan became effective and began distribution in January 2025 reflects the remarkable success of recovery efforts.”
To receive dividends, creditors must first log into the FTX Debtor customer portal, complete KYC verification, and submit the required tax forms. Creditors will then have to choose either BitGo or Kraken to manage their distribution. Onboarding instructions for each platform are provided on the FTX Debtors customer portal.
FTX's restructuring plan, which promises 98% of creditors to receive at least 118% of their claims in cash, was approved by a U.S. judge in early October. The total amount of recovered funds is estimated to be between $14.7 billion and $16.5 billion, with sources including FTX's liquidated assets, overseas branches, government agencies, and partner organizations.
K33 analysts estimate that approximately $2.4 billion could be reinvested into the crypto market after the plan is implemented. Approved claims under $50,000 will be repaid within 60 days of the effective date, but claims larger than that could take until mid-2025 to fully resolve.
Analysts note that $3.9 billion of the total insurance proceeds were purchased by credit funds, making them unlikely to re-enter the crypto market. Additionally, 33% of the remaining claims are owned by sanctioned countries. Insiders and individuals without KYC verification may not be able to claim funds.
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