FTX to Begin Repayments on January 3 Through BitGo and Kraken

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As a seasoned crypto investor who has weathered multiple market cycles and witnessed the rise and fall of numerous digital assets, I can’t help but feel a mix of emotions upon hearing the news that FTX creditors might finally see their funds returned in 2025. While it’s been a rollercoaster ride filled with twists and turns, it’s heartening to know that justice may be served, albeit overdue.

FTX and its connected debtors have verified that their Chapter 11 restructuring plan, which has been approved by the court, will become effective on January 3, 2025. The initial round of payouts to creditors is anticipated to take place within two months following the plan’s implementation date.

The company disclosed agreements with BitGo and Kraken to facilitate the distribution process. 

FTX Creditors To Finally Recieve the Funds in 2025

As per the announced plan, FTX has provided a schedule for the initial return of funds to creditors, which is over two years following their Chapter 11 bankruptcy filing. If certain criteria are met, the first category of claim holders may receive their repayments within this specified timeframe.

In order to receive the initial payout, creditors need to submit their tax paperwork and sign up with either BitGo or Kraken as a partner. For those claims that have been transferred, payments will only be issued to the registered recipient shown in the official claim registry as of January 3rd.

Firstly, it takes 21 days without any objections for these distributions to be finalized. After this period, further information regarding repayments for other creditor categories is anticipated within the upcoming months.

Creditors of FTX have the option to receive their repayment via a traditional USD bank transfer or also through a stablecoin. A significant portion of these funds has been amassed as a result of lawsuits filed against various other trading platforms and exchanges.

In simpler terms, Sunil, who claims to be an advocate for FTX creditors, reported that FTX filed a legal action against Gate on November 24th to retrieve approximately $40 million in cryptocurrency assets. This money is intended to compensate for crypto assets held on the exchange. Furthermore, he noted that transactions on the blockchain show around $35 million has been moved back into wallets controlled by FTX.

As a crypto investor, I’ve been closely watching the developments between FTX and Binance, particularly the lawsuit filed by FTX against Binance and its CEO, Changpeng Zhao. The allegation is that Sam Bankman-Fried misappropriated approximately $1.8 billion of funds.

However, the token remains down by 96% from its 2021 all-time high before the exchange’s collapse.

In October, a judge approved FTX’s plan for reorganization, enabling the company to refund around 98% of debts owed to creditors, including users who had claims under $50,000 and were categorized as part of the “convenience class”. These groups are anticipated to receive their repayments first during the distribution phase.

The FTX Saga is Nearing its End

In November 2022, FTX sought protection under bankruptcy law due to financial struggles stemming from a liquidity issue and the departure of its founder and previous CEO, Sam Bankman-Fried. This filing triggered numerous accusations against key personnel at FTX and Alameda Research.

Previously this year, Sam Bankman-Fried was handed a 25-year imprisonment sentence. In comparison, Caroline Ellison, once CEO of Alameda Research and his alleged accomplice, received a much lighter penalty of 24 months in prison. This leniency is attributed to Ellison’s extensive collaboration with the prosecution during Bankman-Fried’s trial.

In the end, Gary Wang wasn’t given a prison sentence due to his cooperation, even though he was responsible for writing the code that facilitated the $11 billion fraud at Alameda.

Earlier this month, the US government moved $33.6 million in FTX-seized cryptocurrency to various wallets, potentially signaling a sell-off. As the case approaches its final stages, FTX continues its efforts to recover and distribute assets. This marks a significant step toward resolution for affected creditors and users.

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2024-12-16 23:29