FTX announced on Thursday that it plans to begin repaying $16.5b to affected customers by March.
“We are pleased to announce that we will begin distributing proceeds in early 2025,” said John J. Ray III, FTX Group CEO. The exchange outlined the process to return funds in a statement.
FTX to Finalize Fund Distribution Process for Customers by Early December
In early December, FTX will finalize deals with agents who will help distribute the funds to customers in supported areas. Then, customers will get instructions on how to set up an account with these agents using the customer portal.
By the end of next month, FTX will make public the exact date when the plan becomes effective. This depends on court approval for the reserve amount for disputed claims.
The exchange expects this plan to go into effect in early Jan. 2025. Further, payments to verified claims in the Convenience Classes will begin within 60 days of implementation.
Customers need to take action to receive their funds on the first distribution day. They must open an account with the chosen distribution company, pass identity checks and fill out the necessary tax documents before the set deadline.
FTX Files Lawsuits to Recover Assets, Including $1.8B From Binance
FTX’s collapse in Nov. 2022 marked a turning point in the crypto industry, exposing one of the largest financial frauds and bankruptcies in recent memory. Once valued at $32b, the exchange fell apart when it was revealed that customer funds had been misused to cover losses at its sister company, Alameda Research, along with other expenses.
This revelation sparked a rush of withdrawals that FTX couldn’t fulfill, forcing it to file for bankruptcy.
A Delaware bankruptcy judge has now approved a recovery plan. Under this plan, FTX will repay creditors with an amount equal to 119% of its allowed claims, based on asset values at the time of the 2022 bankruptcy.
FTX has been busy in court, recently filing over 20 lawsuits in Delaware to help recover assets for its creditors. It recently went after Binance, claiming it wants back nearly $1.8b which it says was fradulently transferred by Sam Bankman-Fried.
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