Key Takeaways
- FTX will start the creditor payout on Jan. 3, 2025.
- Small creditors with claims of up to $50,000 will be prioritized.
- The payouts will go on for 60 days after the commencement date.
Beleagured crypto exchange FTX will begin distributing funds to creditors on Jan. 3, 2025, marking a significant milestone in its Chapter 11 bankruptcy proceedings.
The initial payouts, expected to continue for 60 days, are part of a long-awaited plan approved by the court.
Priority for Small Creditors in $16.5 Billion Payout
A significant portion of FTX’s creditors—more than 90%—hold claims under $50,000.
These creditors will be prioritized in the initial phase of reimbursements, which are expected to take place over the first 60 days following the plan’s commencement.
The total payout from FTX’s bankruptcy plan could reach up to $16.5 billion.
According to court filings, 98% of creditors are projected to receive 118% of the value of their claims.
Payments will be made in U.S. dollars based on the value of crypto assets held by creditors as of Nov. 2022.
FTX CEO John J. Ray III emphasized the painstaking efforts involved in finalizing the bankruptcy plan.
“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 encourage customers to complete the necessary steps to begin receiving distributions in a timely manner.”
FTX, once valued at more than $30 billion, became one of the largest and most prominent crypto exchanges in the U.S. before it filed for bankruptcy in November 2022.
Kraken and BitGo to Handle Payouts
To facilitate the distribution of funds, FTX has partnered with crypto exchanges Kraken and BitGo. These companies will help distribute the recoveries to both retail and institutional creditors in approved regions.
Steps to Receive Payouts
Creditors must complete several steps before Jan. 3 to be eligible for payouts. These include:
- Logging into the FTX Debtors’ Customer Portal.
- Completing the required Know Your Customer (KYC) verification.
- Submitting the necessary tax forms.
Claimants must ensure their information is up to date on the FTX claims portal by Jan. 3. The official claims list for that day will address any changes in claim ownership.
FTX has also warned against fake platforms and phishing scams, advising that only official channels will provide authentic updates.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.
Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.
