After more than 2 years of twists and turns and complex procedures, FTX begins the long-awaited redistribution of funds to its creditors. This first phase of reimbursements finally suggests the end of the tunnel for a case that will forever mark the crypto market.
Reimbursements for customers harmed by FTX will finally begin
On January 3, 2025, FTX's reorganization plan, approved last October, officially came into effect. The first repayments concern creditors belonging to “Convenience Classes”, or those whose claims amount to $50,000 or lessthat is to say the vast majority of individuals concerned.
The FTX Debtors Plan of Reorganization is effective today, January 3, 2025. Today is also the initial distribution record date for holders of allowed claims in the Plan's Convenience Classes. Separate record and payment dates for other classes of claims will be announced later.
— FTX (@FTX_Official) January 3, 2025
According to the details shared, 98% of investors should receive around 119% of the declared value of their fundsincluding capital and interest. However, this is a percentage based on the value of the cryptocurrencies at the time of FTX's bankruptcyi.e. when the price of Bitcoin was below $20,000.
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This initial phase represents approximately $1.2 billion and is expected to be completed within 60 days of the effective date of the plan. However, for claims exceeding $50,000, the process will take longer. These creditors will have access to a separate fund of $10.5 billion, with repayments scheduled for later in the year.
Cryptocurrency exchanges BitGo and Kraken have been appointed to manage the distributionsthus ensuring the security and transparency of payments. Creditors will have to complete several formalities, including KYC verification and submission of tax forms, before they can receive their funds.
If you are concerned, the choice of platform to receive your assets can be found in step 8 of the FTX claims portal. For any additional information, we invite you to consult the dedicated FTX blog article.
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Reimbursements that disappoint some investors
Although FTX's reorganization plan provides some relief to creditors, it is not unanimous. Some criticize the choice to base reimbursements on cryptocurrency prices in November 2022, at the time of FTX's bankruptcy.
Since then, Bitcoin has seen its value increase by 400%, making the terms of the plan – much – less favorable for the majority of injured investors. While this is understandable, it would have been impossible to repay investors taking into account the overall rise in the crypto market, with FTX's coffers having been found empty.
⚖️ In similar news – FTX case: Celsius appeals to recover $444 million
Despite these criticisms, this massive redistribution of funds could have a significant impact on the cryptocurrency market. Analysts estimate that around $2.4 billion could be reinjected into the crypto ecosystempotentially fueling further bullish momentum as Donald Trump's inauguration fast approaches.
Alongside the reimbursements, speculation surrounds a possible presidential pardon for former FTX CEO Sam Bankman-Fried due to his role as a major donor to the Democratic Party in the 2020 elections. The latter is currently serving his sentence at the Brooklyn Metropolitan Detention Center, where Jeffrey Epstein and Bernard Madoff have notably spent time, and where Sean Combs (P. Diddy) is currently staying.
For their part, Ryan Salame and Caroline Ellison, who are among the main lieutenants of “SBF”, saw their prison sentences reduced thanks to their collaboration in understanding the FTX affair.
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