After years of uncertainty, the defunct cryptocurrency exchange FTX, previously led by convicted founder Sam Bankman-Fried, has announced the effective date for its Chapter 11 reorganization plan aimed at distributing funds to affected customers.
Initial Distribution Date Set
On Monday, FTX Trading Ltd. and its affiliated debtors revealed that their court-approved Chapter 11 Plan of Reorganization will take effect on January 3, 2025. This date has also been designated as the initial distribution record date for holders of allowed claims within the plan’s Convenience Classes.
The initial distribution is expected to occur within 60 days of this effective date, although participation will be subject to know-your-customer (KYC) and other distribution requirements.
Notably, the initial distribution will be limited to the plan’s Convenience Classes, with separate record and payment dates for other classes of claims to be announced in due course.
John J. Ray III, the Chief Executive Officer of the FTX Debtors, expressed optimism about the progress made over the past two years. He stated:
Our team of professionals has 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 efforts. We are well positioned to begin executing the distribution of recoveries back to all customers and creditors, and we encourage customers to complete the necessary steps to begin receiving distributions in a timely manner.
BitGo And Kraken To Assist FTX In Distributing Recoveries
To facilitate the distribution process, FTX announced it has entered into agreements with two major crypto companies: BitGo and Kraken.
BitGo, a globally regulated custodian, has been providing institutional-grade trading and settlement services since 2013, while Kraken, a US-based cryptocurrency exchange founded in 2011, offers spot trading and regulated derivatives across up to 190 countries.
These partnerships aim to ensure that recoveries are effectively distributed to both retail and institutional customers affected by the companies collapse, as well as other creditors in supported jurisdictions, in accordance with the reorganization plan.
For transferred claims, distributions will only be made to the transferee holder of an allowed claim that has been processed and recorded in the official register of claims maintained by the Notice and Claims Agent as of the January 3, 2025 record date. This is contingent upon a 21-day notice period lapsing without any objections.
At the time of writing, FTT, FTX’s native token, has experienced a significant impact from the recent news, coinciding with a broader uptrend in the market over the past 24 hours.
FTT is currently trading at $3, breaking out of a consolidation phase that lasted from April to September of this year, during which it fluctuated between $1.30 and $1.50. At present, the token has recorded gains of 23% over the past two weeks and an impressive 52% over the past month.
Featured image from DALL-E, chart from TradingView.com