FTX To Begin Repaying Customers in Early 2025—What You Need To Know
More than two years after the collapse of cryptocurrency exchange FTX, some of its customers will start getting their money back early next year.
FTX's reorganization plan to repay debtors is set to take effect on Jan. 3, 2025 with actual payments being made shortly after, the company announced Monday.
“We are well positioned to begin executing the distribution of recoveries back to all customers and creditors,” said FTX CEO John J. Ray III.
The first batch of customers will begin receiving payments within 60 days of the Jan. 3 effective date, provided they meet certain conditions.
The initial repayments will prioritize the “convenience classes,” primarily customers with claims of $50,000 or less.Subsequent repayment groups that likely include larger debtors will be announced later as the process unfolds.
To assist with the distribution of the recovery funds, FTX has enlisted crypto firms Kraken and BitGo.
FTX filed for Chapter 11 bankruptcy protection in late 2022 following a liquidity crisis. Earlier this year, its former co-founder and former CEO, Sam Bankman-Fried received a 25-year prison sentence for his role in the fraud that took place at the exchange.
After a lengthy bankruptcy and recovery process, FTX now has between $14.7 billion and $16.5 billion to repay its customers and other debtors. In October, a bankruptcy judge approved FTX's reorganization plan, which includes a timeline for repaying 98% of users more than what they lost (roughly 119%) of their claimed account value.
However, these repayment calculations are based on the U.S. dollar-value of customer deposits as of November 2022. In other words, customers have missed out on the massive rally in the bitcoin and greater crypto markets that has
Read more on investopedia.com
