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The Key Takeaways
- In early 2025, former FTX users with claims below $50,000 can expect to receive their refunds.
- A repayment date has been fixed for 3 January 2025. All payments must be received within 60 days from this date.
- The bankruptcy plan is marketed as an option that will provide 119% of the account value to the majority of users. However, in reality the user would have missed the huge gains made on the cryptocurrency market since November 20, 2022.
- The crypto exchange Kraken, and the cryptocurrency custodian BitGo will assist in bankruptcy distributions.
Some of its clients will receive their money in the first quarter of next year, more than two years since the collapse of cryptocurrency trading exchange FTX.
FTX's reorganization plan to repay debtors is set to take effect on Jan. 3, 2025 with actual payments being made shortly after, the company announced Monday.
“We are well positioned to begin executing the distribution of recoveries back to all customers and creditors,” John J. Ray III is the CEO of FTX.
Repayment Schedule for FTX
Customers will receive payments for the first 60 days following Jan. 3. This is provided that they have met certain criteria.
Priority will be given to the initial payments “convenience classes,” Most customers have claims under $50,000. As the process progresses, we will announce a series of subsequent repayment groups which may include debtors with larger amounts.
FTX partnered with BitGo and Kraken to help distribute the recovered funds.
The FTX Customer Refund Program Will Be Completed Soon, but Is it Enough?
FTX sought Chapter 11 bankruptcy protection at the end of 2022, following a crisis in liquidity. Sam Bankman Fried, the former cofounder of FTX and its CEO, was sentenced to 25 years in prison earlier this year for his involvement in a fraud at the exchange.
After a prolonged bankruptcy and recovery procedure, FTX currently has between $14.7bn and $16.5bn to repay customers and other creditors. A bankruptcy judge approved FTX’s reorganizational plan in October. It includes a schedule for paying 98% of customers more than they have lost, or roughly 119.5% of the claimed value of their account.
The repayment calculation is based, however on the dollar value of customers’ deposits in November 2022. Other words, the customers missed out on the enormous rally in bitcoin and other crypto markets since November 2022.
In 2022, the value of bitcoin (BTCUSD) traded at around $17,000. It is now worth more than $100,000.
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