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- Three years after FTX’s November 2022 bankruptcy, a reorganization plan began on January 3, enabling user repayments to start.
- Creditors must complete tax documents and onboard with BitGo or Kraken to receive initial payouts, with FTX aiming to repay up to 98% of losses and some creditors recovering up to 119%.
In the wake of one of the most significant collapses in the cryptocurrency space, FTX, once a major player in the digital asset market, has laid out a reorganization plan aimed at repaying affected users. The company, which filed for bankruptcy in November 2022, has been working diligently to recover and restructure its operations amid ongoing legal proceedings.
FTX has between $14.7 billion and $16.5 billion available to repay its customers and creditors. In October 2024, Judge John Dorsey of the U.S. Bankruptcy Court for the District of Delaware approved the company’s reorganization plan, outlining a timeline to reimburse 98% of users, with some receiving up to 119% of their claimed account value. The plan took effect on January 3, 2025, marking the start of the repayment process.
Repayment Process and Market Implications
FTX’s debtors cautioned users on X about potential phishing attempts disguised as communications from the exchange. To be eligible for reimbursement, customers must have submitted claims through the official website; repayments are expected to begin within 60 days for the first group of users.
Repayments to FTX customers are calculated based on their deposits’ November 2022 U.S. dollar value. Many creditors believe the sharp rise in cryptocurrency prices, including Bitcoin’s 400% growth since then, has made these terms less favorable. The company plans to distribute $16 billion, and market experts anticipate this could inject substantial liquidity into the crypto market, potentially sparking a bullish trend.
Notably, claims larger than $50,000 might not be processed until later this year, while smaller claims are expected to be finalized by February or March. As reported earlier by CNF, creditors must adhere to specific steps to receive their distributions.
This process involves accessing the FTX portal, completing KYC requirements, submitting tax documents, and establishing accounts with either Kraken or BitGo. If all users file complete claims, the exchange could potentially disburse approximately $16 billion.
Caroline Ellison, the former CEO of Alameda Research and ex-girlfriend of Sam Bankman-Fried, was sentenced to two years in prison after pleading guilty to seven charges of fraud and conspiracy. She served as a crucial witness in Bankman-Fried’s case. Her anticipated release date is now July 20, 2026, which is three months earlier than originally scheduled. In contrast, Bankman-Fried received a 25-year prison sentence, and his release date remains unspecified on the prison’s website.
John Ray III was appointed as the CEO of the cryptocurrency exchange FTX following its collapse and had initially voiced optimism about the possibility of rebooting the exchange. Despite these attempts, investors did not respond with any positive enthusiasm for revitalizing the failed platform
