FTX and its affiliated debtors have announced that their reorganization plan will officially take effect on January 3, 2025, with distributions set to commence within 60 days. This news comes after a tumultuous period for the company, which collapsed in November 2022 due to mismanagement of funds by its founder, Sam Bankman-Fried, and other executives.
To manage the distribution process for retail and institutional creditors, FTX has partnered with BitGo and Kraken. These service providers will ensure that distributions are executed efficiently and securely across supported jurisdictions, with the option to receive distributions through stablecoins. The initial distribution will only apply to creditors in the plan’s “Convenience Classes,” with separate payment dates to be announced for other classes in the future.
In a statement, FTX CEO John J. Ray III expressed confidence in the company’s ability to begin distributing recoveries back to all customers and creditors. He encouraged customers to complete the necessary steps to receive distributions promptly, emphasizing the importance of meeting eligibility requirements. Creditors must complete know-your-customer validations, submit tax forms, and onboard with distribution partners to be eligible for the initial distribution.
It is crucial for creditors to be wary of phishing scams and only rely on official communications from FTX through verified channels. The company will never request users to connect wallets or provide sensitive financial details outside of the official customer portal. US Bankruptcy Judge John Dorsey approved the $16.5 billion recovery plan during a hearing in Wilmington, Delaware, on October 7, subject to a potential decrease to $14.7 billion after cash conversion.
As FTX prepares to move forward with its reorganization plan, it is essential for creditors to stay informed and take the necessary steps to ensure they receive their rightful distributions. By following the guidelines set forth by the company and remaining vigilant against potential scams, creditors can navigate this challenging process with confidence.