FTX and its affiliated debtors have provided an update on their upcoming timeline for creditor and customer distributions, announcing that they are on track to implement their Chapter 11 Plan of Reorganization by January 2025. This plan will set distributions for creditors and customers, with final arrangements with specialized distribution agents expected to be completed in December. Customers in supported jurisdictions will be able to establish accounts through FTX’s customer portal.
The exact date for reimbursements will be revealed in December once court approval for the Disputed Claims Reserve Amount has been secured. The first round of distributions will begin in January 2025, targeting holders in the Convenience Classes and scheduled within 60 days of the effective date.
FTX CEO John J. Ray III expressed his pleasure in announcing the distribution of proceeds in early 2025, highlighting the team of professionals who have already recovered billions of dollars on behalf of FTX’s creditors and customers. The $16.5 billion recovery plan was approved by US Bankruptcy Judge John Dorsey during a hearing in Wilmington, Delaware, on October 7. Customer repayments will rely on settlements made with FTX customers, creditors, US government agencies, and international liquidators.
The approved plan prioritizes FTX customers, allowing the exchange to repay their claims first before competing claims from government regulators. The total value recovered could reach $16.5 billion, potentially falling to $14.7 billion after cash conversion. The FTX collapsed in November 2022 due to mismanagement of funds by founder Sam Bankman-Fried and other executives, leaving around 9 million customers and investors facing significant financial losses.
FTX has outlined reimbursement requirements for customers, emphasizing the need to establish approved accounts with distribution agents, complete Know Your Customer (KYC) verification, and submit tax forms before the distribution record date to qualify for the initial payout. Claims traders have been cautioned that transfers made within 45 days of the distribution record date may not be reflected in the claims register in time, potentially redirecting distributions to the original claim holders.
In conclusion, FTX is making significant progress in implementing their Chapter 11 Plan of Reorganization, aiming to provide distributions to creditors and customers by January 2025. The approved $16.5 billion recovery plan prioritizes customer repayments and sets a clear timeline for reimbursements and distributions. It is crucial for customers to meet the reimbursement requirements to ensure they receive their entitled payouts.