- FTX’s bankruptcy Plan of Reorganization is approved, with payouts to eligible creditors starting in January 2025.
- Creditors must complete KYC, submit tax forms, and register with the exchange’s partners to claim funds.
- The exchange warns against scams and urges reliance on the official Customer Portal for updates.
FTX announced that its bankruptcy Plan of Reorganization received approval from the court and that it would take effect officially on January 3, 2025. Incidentally, this date marks a significant milestone, being a record date for the first-round distribution to eligible creditors under the plan. The disbursement will cover creditors falling under Convenience Classes as per the classification under the Plan, and “distributions are expected to begin within 60 days following the effective date of the Plan.
FTX Outlines Key Steps for Fund Distribution
The exchange has set out clear steps, which need to be taken by both clients and creditors so that their claims get distributed smoothly. These are verification of their identities via the Know Your Customer process (KYC), submission of applicable tax forms, and registration through a designated platform by FTX’s official distribution partners.
Instructions for these steps will be provided through the FTX Customer Portal, which continues to be the first and authoritative venue for such information. The CEO of the exchange, John J. Ray III, marked the moment, congratulating the recovery efforts that have brought the company to this point. He said:
“For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point. The Plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of the recovery effort.”
Ray’s comments underscore the massive effort undertaken since the exchange filed for bankruptcy in November 2022. Over the past two years, the recovery team has worked diligently to trace and reclaim funds, with billions now being distributed to rightful creditors.
FTX Details Claim Eligibility and Scam Alerts
For this, FTX contracted two firms to assist it in the payout process, for which creditors were supposed to sign up with any of those firms by following some multi-step instructions on the official Customer Portal. Notably, for any transferred or sold claim, only the holders of the claim as of January 3, 2025, would be allowed to get the payments.
The exchange, meanwhile, issued warnings against scams amid the announcements. The company urged creditors and customers to be vigilant against phishing attempts, fake websites, and communications that might impersonate FTX fraudulently.
The exchange further reminded them that no wallet connection or sensitive personal information would ever be asked for via mail. Customers should refer only to the FTX Customer Portal and the verified account on X belonging to FTX for real-time updates and communications.
While the exchange has not announced the payout dates for the other creditor classes, it assured stakeholders that further details were to be expected. Now, all eyes are stuck on the fulfillment of the claims under the Convenience Classes that offers the first route of compensation for creditors who endured two years of uncertainty since the fall of the exchange.
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