After years of uncertainty, now-defunct cryptocurrency exchange FTX, previously run by convicted founder Sam Bankman-Fried, announced the effective date of its Chapter 11 reorganization plan to distribute funds among affected customers.
An initial distribution date has been set
On Monday, FTX Trading Ltd. and its related debtors revealed that their court-approved Chapter 11 Plan of Reorganization will become effective on January 3, 2025. This date has also been designated as the initial distribution record date for holders of permitted claims under the plan’s convenience classes.
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 policies distribution requirements.
It is worth noting that the initial distribution will be narrow to the plan’s Convenience classes, with separate enrollment and payment deadlines for the remaining claim classes to be announced in due course.
John J. Ray III, CEO of FTX Debtors, expressed optimism about the progress made over the past two years. He stated:
Our team of professionals have worked diligently and effectively to recover billions of dollars to get to this point. The plan, which will go into effect in January 2025, and the start of payments reflect the outstanding success of the recovery effort. We are well prepared to begin disbursing recovered funds back to all customers and creditors, and we encourage customers to take the necessary steps to begin receiving payments on time.
BitGo and Kraken assist FTX in distributing recovered funds
To facilitate the distribution process, FTX announced that 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 in as many as 190 countries.
The purpose of these partnerships is to ensure the effective distribution of recovered funds to retail and institutional clients affected by the failure of companies, as well as to other creditors in the supported jurisdictions, in accordance with the reorganization plan.
In the case of transferred receivables, distributions will only be paid to the holder of the assignee of a recognized claim that has been adjudicated and registered in the official register of claims maintained by the Notice and Claims Agent as at the date of registration on January 3, 2025. This is subject to a 21-day notice period without any reservations.
At the time of writing, FTT, the native token of FTXhad a significant impact of recent news coinciding with the broader one upward trend on the market in the last 24 hours.
FTT is currently trading at $3, emerging from a consolidation phase from April to September this year during which it fluctuated between $1.30 and $1.50. Currently, the token has seen an boost of 23% in the last two weeks and an impressive 52% in the last month.
Featured image from DALL-E, chart from TradingView.com
