Michaela Alvez
Cryptocurrency exchange FTX has set an initial date for payment distribution to claimants, more than two years after the company filed for bankruptcy.
In a press release, FTX and its affiliated debtors announced that claimants can expect the initial distribution of funds to begin within 60 days of the effective date. The debtors set January 3, 2025 as the official start date for the distribution, following the court’s approval of their Chapter 11 Plan of Reorganization.
Debtors announced that cryptocurrency custody and security firm BitGo, along with crypto exchange Kraken, will assist in distributing recovery payments to FTX users. The record and payment dates for other classes of claims will be announced at a later time.
“For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point,” CEO of the FTX debtors John Jay Ray III said. “We are well positioned to begin executing the distribution of recoveries back to all customers and creditors, and encourage customers to complete the necessary steps to begin receiving distributions in a timely manner,” he added.
The date announcement follows the approval of FTX’s bankruptcy plan by U.S. Bankruptcy Judge John Dorsey in October.
FTX shared that the finalized plan of reorganization would allow 98% of its creditors to receive 119% of their approved claims, provided certain conditions are met.
In a statement, Ray highlighted that the distribution of funds would reach creditors across 200 jurisdictions worldwide.
FTX’s Fall From Grace
FTX was once one of the largest and most well-known cryptocurrency exchanges in the world. Its collapse in 2022 has become one of the most dramatic stories in the crypto space, involving massive losses, legal battles, and a series of revelations about poor management, alleged fraud, and misappropriation of funds.
In November 2023, Sam Bankman-Fried, its founder, was sentenced to 25 years in federal prison for orchestrating a large-scale cryptocurrency fraud that resulted in the loss of over $8 billion from investors.
FTX was also in a close relationship with Alameda Research, the trading firm also founded by Bankman-Fried. It was later revealed that the two companies were intertwined, with the former allegedly using customer funds to cover Alameda’s risky trades.
Former Alameda Research CEO Caroline Ellison was sentenced to two years in prison and began serving her sentence in November 2024.
FTX executives Nishad Singh and Gary Wong avoided prison time after reaching plea deals with the U.S. government. As part of the agreements, both executives cooperated with authorities in the investigation and prosecution of Bankman-Fried.
Mike Belshe, CEO of BitGo, stated that the company was “proud to support FTX,” emphasizing its role in giving users the peace of mind they need to manage and grow their assets safely.
Read More
- US Government Transfers $33.6M in Seized FTX Crypto to Unknown Wallets
- FTX’s Gary Wang Goes From Coder to Crime-Fighter with Anti-Fraud Tools
- FTX’s New Lawsuit Against Binance and CZ Seeks $1.76 Billion
Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
