- FTX will distribute $16 billion to creditors starting 60 days after the January 3, 2025 record date.
- Eligible creditors must complete KYC verification, tax forms, and onboard with BitGo or Kraken.
- The payout marks a significant milestone in FTX’s Chapter 11 recovery plan after its 2022 collapse.
In a major development for victims of the collapsed FTX exchange, the Court-approved Chapter 11 Plan of Reorganization is set to become effective on January 3, 2025.
This huge milestone comes after over two years of the exchange’s downfall in November 2022. The Initial Distribution will be limited to holders of allowed claims in the Plan’s Convenience Classes, with funds expected to reach claimants within 60 days of the effective date.
FTX, led by CEO John J. Ray III, has worked hard to recover billions of dollars for customers and creditors. Ray highlighted the achievement: “The Plan becoming effective in January 2025 and the start of distributions reflect the outstanding success of the recovery efforts.”
He urged customers to complete the necessary KYC verification, tax forms, and onboarding with distribution partners to ensure timely payouts.
FTX Partnerships with BitGo and Kraken
FTX has onboarded BitGo and Kraken as service providers.
BitGo, a regulated crypto custodian since 2013, specializes in secure trading and settlement solutions for retail and institutional clients. Kraken, one of the oldest U.S.-based crypto exchanges, offers spot trading and derivatives to users in over 190 countries.
Eligible customers and creditors must be onboarded with one of these platforms via FTX’s official Customer Portal (https://claims.ftx.com) to ensure compliance with distribution requirements.
FTX Debtors have warned customers to remain vigilant against phishing attempts and fraudulent websites pretending to be the official FTX claims portal. The FTX team emphasized that the company will never request users to connect their wallets.
The bankruptcy proceedings for FTX began after the company’s highly publicized collapse, revealing an $8 billion shortfall. Founder Sam Bankman-Fried is currently serving a 25-year prison sentence.
Additionally, key executives including Caroline Ellison, Nishad Singh, and Gary Wang faced various penalties due to their involvement. In a significant development, U.S. Bankruptcy Judge John Dorsey approved the reorganization plan in October 2024.
This plan promises substantial recovery for claimants, with 98% of creditors expected to receive 119% of their allowed claims. This initial distribution marks a pivotal turning point for the victims of one of history’s largest financial frauds. As John Ray III stated, “We are well positioned to execute the distribution of recoveries back to all customers and creditors.”
