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FTX Chapter 11 plan to begin January 3, 2025 with $16.5B recovery

FTX Chapter 11 plan to begin January 3, 2025 with $16.5B recovery

GrafaGrafa2024/12/18 16:00
By:Mahathir Bayena

FTX (CRYPTO:FTT) has confirmed that its Chapter 11 reorganisation plan will officially take effect on January 3, 2025.

This date will also serve as the initial distribution record for claimants in the plan’s convenience classes.

Payments are expected to begin within 60 days from the plan’s effective date.

Claimants will need to complete know-your-customer (KYC) procedures and submit necessary tax forms to comply with distribution requirements.

The first round of payments will be restricted to the convenience classes, and separate records and payment dates for other claims will be announced later.

FTX’s reorganisation plan, which received court approval in October 2024, has gained widespread support from creditors.

Creditors are expected to recover an average of 119% of their claims, with some potentially receiving up to 140% in cash.

FTX estimates that total recoveries will range from $14.7 billion to $16.5 billion.

This recovery was made possible through efforts to reclaim assets from various parties, including the U.S. Department of Justice and international regulators.

“For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point,” stated FTX CEO John J. Ray III emphasised the success of the recovery efforts.

Ray also urged claim holders to complete all necessary steps to avoid delays in receiving their payments.

To support the distribution process, FTX has partnered with BitGo and Kraken, two crypto custodians, to help disburse funds to both retail and institutional claimants in supported jurisdictions.

FTX’s bankruptcy filing in late 2022 marked one of the most significant collapses in the crypto industry, accompanied by several high-profile convictions.

Former CEO Sam Bankman-Fried was sentenced to 25 years in prison for wire fraud and conspiracy.

At the time of reporting, the price of FTX (FTT) was $2.79.

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