Collapsed cryptocurrency exchange, FTX will start distributing funds to investors who incurred losses through partner crypto firms, including Kraken and BitGo.
The company announced today (Monday) that its court-approved Plan of reorganization will become effective on January 3, 2025. Given the necessary requirements, FTX anticipates the first wave of distributions within 60 days following the effective date.
Two-year Recovery Process
This initial distribution will reportedly be limited to the plan's convenience classes, with specific records and payment dates for other claim classes set to be announced in the future.
For two years, FTX has worked with its team of professionals to recover billions of dollars. John J. Ray III, the CEO of the FTX Debtors, described the process as a success, noting that the distribution process marks the culmination of a long journey.
As part of the process, the company has entered into agreements with two major partners, BitGo and Kraken, to handle distribution in supported jurisdictions.
The FTX Debtors today announced that the effective date for its Plan of Reorganization has been set for January 3, 2025, which is also the initial distribution record date for holders of allowed claims in the Plan’s Convenience Classes. Read more here: https://t.co/7Hggm5cTlS
— FTX (@FTX_Official) December 16, 2024
FTX’s choice of Kraken and BitGo as distribution partners highlights the importance of security and trust in the distribution process. Kraken, a US-based cryptocurrency exchange, has been selected to handle retail customer payouts in the U.S. and other supported regions.
Kraken and BitGo
BitGo, a digital asset custody platform, will also assist FTX in distributing recoveries to both retail and institutional customers. Creditors eligible for the initial distribution will need to complete steps through the FTX Debtors’ customer portal to ensure they are ready for the payouts.
This includes verifying their identity and meeting other required conditions to participate in the distribution. FTX also asked customers to take the necessary steps to avoid delays and ensure they can begin receiving their recoveries on time. The firm added that further announcements regarding payment schedules for other claim types will follow in the coming months.
BREAKING: A judge sentenced Sam Bankman-Fried to 25 years in prison for orchestrating what prosecutors have called one of the biggest financial frauds in American history. https://t.co/kRbXasrxD1 pic.twitter.com/JBIYKXfmQN
— ABC News (@ABC) March 28, 2024
In March, Sam Bankman-Fried was sentenced to 25 years in prison after being found guilty of multiple counts of wire fraud and conspiracy that caused the collapse of the crypto exchange and led to billions of dollars in losses to investors.
This article was written by Jared Kirui at www.financemagnates.com.
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