The FTX debtors group has announced that its bankruptcy plan officially took effect on January 3, marking the beginning of a crucial step in reimbursing the bankrupt exchange’s creditors.
FTX is prioritizing claims under $50,000, with repayments set to begin within 60 days of the effective date. Creditors will receive 119% of their allowed claim amount, including principal and accrued interest.
FTX Bankruptcy Plan Takes Effect
The FTX Bankruptcy Plan began its first round of distributions on January 3, targeting approved claims within the “Convenience Classes.” Creditors must satisfy the pre-distribution criteria to be eligible for the payout. This includes KYC verification and ensuring all claims were classified as allowed by the initial distribution record date. Customers must submit their claims via FTX’s official website. According to the exchange, the first group of users will receive their payment within 60 days.
The plan, approved in October, allows users to receive 119% of the declared value of their funds. The repayment process is the final step in the FTX bankruptcy saga. It began with the exchange’s bankruptcy filing and the arrest of Sam Bankman-Fried and other senior FTX executives for their role in the collapse.
“The FTX Debtors Plan of Reorganization is effective today, January 3, 2025. Today is also the initial distribution record date for holders of allowed claims in the Plan’s Convenience Classes. Separate record and payment dates for other classes of claims will be announced later.”
Users Warned Of Phishing Scams
However, the FTX debtors also cautioned users, urging them to be vigilant against phishing emails from scammers that appear to come from the exchange.
“The FTX Debtors also remind customers to please remain aware of phishing emails that may look like they are from FTX Debtors and scam sites from channels that may appear to look like the FTX Debtors’ Customer Portal.”
Not Everyone Is Happy
However, not all FTX users are happy with the bankruptcy plan and have criticized the decision to base reimbursements to creditors on the price of assets held by the exchange at the time of its bankruptcy. BTC’s price has surged more than 400% since the FTX collapse, with the asset trading just under the $100,000 mark.
Meanwhile, only two former FTX executives, former engineering director Nishad Singh and co-founder Gary Wang, avoided prison. Former Alameda Research CEO Caroline Ellison, former FTX Digital Markets co-CEO Ryan Salame, and former CEO Sam Bankman-Fried have all been sentenced to prison terms.
Liquidity Boost
Analysts have speculated that FTX repayments could inject considerable liquidity into the markets and potentially start another bull run. However, claims above $50,000 will not occur until later this year. Crypto influencer Quinten Francois stated on X,
“FTX will repay $16 billion to creditors starting today. Payments are expected within 60 days. A big chunk of that $$$ might flow BACK INTO CRYPTO. The bull run just got its fuel. Buckle up,” wrote influencer Quinten Francois.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
