- FTX will initiate a $16.5B repayment to affected customers by March 2025, following its 2022 collapse.
- Distribution agents will be finalized by December, and FTX will announce the repayment start date.
- A Delaware judge approves FTX’s recovery plan, promising creditors 119% of their claims while lawsuits continue.
FTX has indicated that it will start the process of paying back the affected users with $16.5 billion by March 2025. This is particularly a milestone considering that the exchange went bankrupt in November 2022, following the discovery of a massive financial scandal.
FTX’s CEO and Chief Restructuring Officer John J. Ray III said that he was hopeful about the repayment process. He stated,
“We are pleased to announce that we will begin distributing proceeds in early 2025. The timeline laid out reflects the experience and continued work of the team of professionals supporting the Debtors, who already have recovered billions of dollars on behalf of FTX’s creditors and customers.”
FTX Finalizing Distribution Agreements
The repayment will continue in the following months, where company is expected to complete the agreements with the distribution agents in early December. These agents will be useful in management of funds for customers in the supported regions and details on account management will be availed to customers through a customer’s interface.
The platform will disclose the specific date about the implementation of the repayment plan by the end of November. This timeline is based on the court approval of the reserve amount set for the disputed claims and the company believes that the plan will be implemented by early January 2025.
After the implementation of the plan, payment to verified claims in the Convenience Classes will be done within 60 days. The users will have to signup with the selected distributors, complete the KYC procedure and furnish their tax documents before the given time to get the payouts.
FTX’s Road to Financial Recovery
The fall of exchange in the last quarter of 2022 marked one of the biggest financial frauds in the crypto space. The customer funds were used to cover the losses at Alameda Research, the sister company of platfrom, and other expenditures which culminated in the loss of liquidity and forced bankruptcy of crypto exchange.
Recently a Delaware Bankruptcy Judge allowed FTX to start the recovery process and in which creditors will be paid back 119% of their allowed claims. This plan is based on asset valuations during the exchange’s bankruptcy in 2022 which will create a roadmap for the company and its creditors.
Aside from the repayment plan, FTX has filed in excess of 20 lawsuits in Delaware to help reclaim the assets. As reported earlier by CWJ, the lawsuit against Binance when FTX wants to recover around $1.8 billion that was allegedly defraudulently transferred by exchange’s CEO Sam Bankman-Fried.
The crypot exchnage is still in the process of restoring its financial position and addressing the victims of the hack, as the industry watches closely. This has raised question on how well the crypto industry can cope with a major scandal through the case of the company’s handling of the recovery process.
