Bankrupt cryptocurrency exchange FTX has announced plans to begin distributing payments to creditors and customers in early 2025. This follows the approval of its Chapter 11 Plan of Reorganization, which is expected to become effective by January.
What Happened: John Jay Ray III, the CEO of FTX, announced that the company anticipates its Chapter 11 Plan of Reorganization will be effective by January 2025.
Ray expressed satisfaction with the progress, stating, “We are pleased to announce that we will begin distributing proceeds in early 2025.”
He emphasized the expertise and ongoing efforts of the professional team supporting the debtors, who have already recovered billions for FTX’s creditors and customers.
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The announcement follows FTX’s nearing completion of the final steps required for the reorganization plan.
Payments are expected to be made within 60 days of the plan’s activation.
“While we continue to take actions to maximize recoveries, we are full steam ahead to reach arrangements with our distribution agents and return proceeds to creditors and customers as quickly as possible,” Ray added.
FTX plans to finalize arrangements with specialized distribution agents by early December. These agents will facilitate the global distribution of recoveries to customers, who will receive instructions to establish approved accounts with these agents.
FTX aims to announce the exact effective date of distribution by the end of next month.
Why It Matters: The announcement marks a pivotal moment in FTX’s bankruptcy proceedings.
In October, a U.S. bankruptcy judge approved FTX’s plan to repay creditors up to $16.5 billion, concluding a two-year bankruptcy saga.
This decision came after a series of legal challenges, including a $12.7 billion restitution order in August and a settlement over Robinhood shares in September.
The approval of the reorganization plan and the upcoming payments are crucial for restoring trust in the crypto ecosystem and providing relief to affected creditors and customers.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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