KeyTakeaways:
- FTX to begin repaying creditors in early 2025, starting with claims under $50K.
- Kraken and BitGo will manage FTX’s creditor repayment process, including KYC verification.
- FTX’s repayment plan could allocate up to $16.5B, covering 98% of creditors.
FTX, the collapsed crypto exchange, is set to begin repaying its creditors and customers in early 2025, with the first round of distributions expected within 60 days of January 3, 2025. This implies a shift in the ongoing bankruptcy process as the exchange works to resolve its Chapter 11 proceedings.
The court-approved reorganization plan for FTX is set to become effective on January 3, 2025. Following that date, FTX’s bankruptcy team, led by CEO John J. Ray III, plans to begin distributing repayments to creditors.
The first batch of repayments is scheduled to go out within 60 days of the effective date, focusing on those creditors with claims under $50,000, which account for more than 90% of all creditor claims in the bankruptcy proceedings.
The distribution process will be managed by the cryptocurrency exchanges Kraken and BitGo. Both platforms will assist eligible creditors in recovery efforts. However, FTX customers are required to complete a series of steps to be eligible for repayment.
This includes undergoing a know-your-customer (KYC) verification process, filling out necessary tax forms, and onboarding to either Kraken or BitGo before the effective date of January 3, 2025.
FTX Payment Process and Distribution Details
According to the report, creditors will receive repayments based on the U.S. dollar value of their crypto holdings when FTX filed for bankruptcy in November 2022. This ensures that the repayment is aligned with the asset prices at that specific point in time.
The initial distribution will focus on creditors with smaller claims, those with amounts of $50,000 or less. The remaining creditors, who hold larger claims, will be notified of the distribution schedule later.
Moreover, according to FTX’s finalized bankruptcy plan, the overall repayment plan could allocate up to $16.5 billion to creditors. This plan, finalized in October 2024, covers 98% of creditors, with expectations that they will receive 118% of their claim values in U.S. dollars.