In summary,
FTX begins repayments under its bankruptcy plan, prioritizing claims under $50,000.
Users must file claims through the official website, with payouts expected in early 2025.
Critics highlight the repayment terms being tied to 2022 cryptocurrency prices.
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FTX announced that its bankruptcy plan went into effect on January 3rd, marking a significant step in its efforts to repay creditors.
On the same day, registration for approved claims under the “Convenience Classes” officially opened.
Repayments Underway 2 Years After Collapse
The FTX Debtors group officially announced the commencement of its reorganization plan today. The exchange warned users about phishing scams impersonating FTX communications. Users should ensure that claims are only filed via their official website. According to FTX, customers who have filed valid claims can expect to see repayments processed within 60 days. The first group to receive repayments includes those with claims under $50,000, as outlined in the bankruptcy plan approved in October.
“The FTX Debtors’ Plan of Reorganization is effective as of today, January 3, 2025. Today is also the record date for the initial distribution to holders of Allowed Claims in the Convenience Classes. Separate record and distribution dates for other claims classes will be announced in the future,”
FTX announced on X (formerly Twitter)
The plan also estimates that 98% of users will receive 119% of the declared value of their assets. This phase could mark the closing chapters of the FTX collapse saga.
The exchange filed for bankruptcy in November 2022, unraveling a high-profile fraud that led to prison sentences for several executives. Former CEO Sam Bankman-Fried is currently serving a 25-year prison sentence. However, there is speculation about a potential pardon for Bankman-Fried. This is due to his role as a major donor to the Democratic Party during the 2020 election.
Additionally, the bankruptcy plan’s reliance on cryptocurrency prices at the time of the exchange’s collapse has drawn criticism. Many creditors argue that the significant increase in cryptocurrency values has made the repayment terms less appealing. For instance, Bitcoin’s price has increased by 400% since 2022.
Meanwhile, market analysts predict that FTX’s repayments could inject significant liquidity into the crypto market, potentially fueling a bull run.
“FTX will be paying back $16 billion to creditors starting today. Payouts expected within 60 days. A big chunk of that could flow back into crypto. The bull run has fuel. Get ready,”
Quinten Francois wrote.
However, disbursement for claims above $50,000 may not occur until later in the year. Only smaller claims are expected to be processed by February or March.
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