FTX is finally gearing up to repay its customers and creditors after a court-approved plan received overwhelming support.
The bankrupt crypto exchange is set to distribute up to $16.5 billion in recovered funds.
When?
In a press release John J. Ray III, the CEO and Chief Restructuring Officer of FTX, expressed optimism about the progress made so far, and he announced that the distribution of funds is expected to kick off in early 2025.
“The timeline reflects the hard work of our team, who have already recovered billions for FTX’s creditors and customers.”
By early December, FTX plans to finalize arrangements with specialized distribution agents who will help facilitate the global recovery process.
Customers will receive instructions on how to set up accounts with these agents through the existing customer portal.
The company will announce the effective date of its repayment plan by the end of December, pending court approval of the disputed claims reserve amount.
Initial distributions are expected to occur within 60 days after this date.
The reorganization plan
The reorganization plan was approved by the U.S. Bankruptcy Court and has garnered strong backing from creditors.
Under this plan, creditors could recover an average of 119% of their claims, with some potentially receiving up to 140% in cash.
FTX estimates that total recoveries will range between $14.7 billion and $16.5 billion, thanks to assets recovered from various sources, including the U.S. Department of Justice and international regulators.
FTX filed for bankruptcy in late 2022 amid a series of high-profile scandals involving mismanagement and fraud.
In November 2023, former CEO Sam Bankman-Fried was convicted on multiple charges, including wire fraud, and sentenced to nearly 25 years in prison. Other executives received lighter sentences for cooperating with authorities.
What this means for users?
While the repayment plan offers hope for those affected by FTX’s collapse, it has also sparked some frustration among creditors who are expected to recover only a fraction of their losses.
Of course, many are still relieved that they will receive something back. Something is still more than zero.
As FTX continues its recovery efforts, settling lawsuits and reclaiming lost funds, the company is focused on restoring trust within the crypto community.
With repayments slated to begin soon, this marks an important chapter in one of the largest financial disasters in crypto history.
