- Three years after the bankruptcy of FTX in November 2022, the reorganization plan began on January 3, which allowed the beginning of repayment of beneficiaries.
- Creditors must fill out tax documents and join BitGo or Kraken to receive initial payouts, with FTX aiming to repay up to 98% of losses and some creditors recovering up to 119%.
Following one of the most significant collapses in the cryptocurrency space, FTX, once a major player in the digital asset market, has outlined a reorganization plan aimed at repaying affected users. The company, which filed for bankruptcy in November 2022, is 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 US Bankruptcy Court for the District of Delaware approved reorganization plan, outlining a timeline for 98% of users to be reimbursed, with some receiving up to 119% of their account value. The plan became effective on January 3, 2025, marking the beginning of the repayment process.
Repayment process and market implications
FTX debtors warned user on X about possible identity theft attempts disguised as communications from the stock exchange. To qualify for a refund, users must submit claims through the official website; repayment is expected to start within 60 days for the first group of users.
Repayments to FTX clients are calculated based on the value of their deposits in US dollars in November 2022. Many creditors believe that the sharp rise in cryptocurrency prices, including Bitcoin’s 400% rise since then, has made these terms less favorable. The company plans to distribute $16 billion, and market experts predict that this could inject considerable liquidity into the crypto market, potentially sparking a bullish trend.
Claims over $50,000 may not be processed until later this year, while smaller claims are expected to be finalized by February or March. As previously announced by CNFCreditors must follow certain steps in order to receive their distribution.
This process includes accessing the FTX portal, completing KYC requirements, submitting tax documents and opening an account on Kraken or BitGo. If all users submit full claims, the exchange could potentially pay out approximately $16 billion.
Caroline Ellison, the former executive director of Alameda Research and ex-girlfriend of Sam Bankman-Fried, was sentenced to two years in prison after pleading guilty to seven counts of fraud and conspiracy. She served as a key witness in the Bankman-Fried case. Her expected release date is now July 20, 2026, which is three months earlier than originally planned. 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 named CEO of cryptocurrency exchange FTX after its collapse and initially expressed optimism about the possibility of relaunching the exchange. Despite these attempts, investors did not react with any positive enthusiasm for the revitalization of the failed platform
