FTX sets January 3, 2025, as effective date for initial distributions to creditors

Home » Regulation » FTX sets January 3, 2025, as effective date for initial distributions to creditors

BitGo and Kraken will handle the distribution of funds to FTX customers as part of the bankruptcy reorganization plan.

FTX is set to initiate creditor distributions on January 3, 2025, after receiving court approval for its Chapter 11 reorganization plan, according to a Monday press release.

The entity plans to begin the first round of payments within 60 days of the effective date, subject to KYC and other distribution requirements. This initial distribution will be limited to specific creditor groups (“Convenience Classes”) as defined in the plan.

The FTX estate has chosen BitGo and Kraken to manage distributions to retail and institutional customers in supported jurisdictions. Kraken is also among five exchanges designated to handle Mt. Gox’s repayments.

Both BitGo and Kraken have confirmed that they will assist with the repayment process in accordance with the approved reorganization plan.

“For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point,” said John J. Ray III, Chief Executive Officer of the FTX Debtors. “The Plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of recovery efforts.”

To receive distributions, creditors must first log in to the FTX Debtors’ Customer Portal, complete KYC verification, and submit the required tax forms. Creditors will then need to select either BitGo or Kraken to manage their distribution. Instructions for onboarding each platform will be provided on the FTX Debtors’ Customer Portal.

FTX’s reorganization plan, which promises that 98% of creditors will receive at least 118% of their claim value in cash, was approved by a US judge in early October. Total recovered funds are estimated between $14.7 billion and $16.5 billion, sourced from FTX’s liquidated assets, international branches, government agencies, and collaborating parties.

K33 analysts estimate approximately $2.4 billion may be reinvested in the crypto markets following the plan’s implementation. While those with approved claims under $50,000 will receive repayments within 60 days of the effective date, larger claims may take until mid-2025 for full resolution.

The analysts note that $3.9 billion of total claims were purchased by credit funds, which are unlikely to reenter the crypto market. Moreover, 33% of the remaining claims are owned by sanctioned countries; insiders, or individuals without KYC verification may be unable to claim the funds.