FTX customers are set to receive their first repayments in early 2025, as the company’s reorganization plan will take effect on Jan. 3.
FTX customers are set to receive their first repayments in early 2025, as the company’s reorganization plan will take effect on Jan. 3. Distributions will be facilitated through crypto firms Kraken and BitGo, with a third partner expected to be announced later. The first round of payments, targeting creditors with claims of $50,000 or less, is planned within 60 days of the effective date. This group represents more than 90% of all creditors involved in the case.
FTX Debtors CEO John J. Ray III called the milestone a significant achievement, stating, “The plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of the recovery efforts.” Customers must complete KYC verification, submit tax forms, and onboard with Kraken or BitGo through the FTX claims portal by Jan. 3 to qualify for payments.
The bankruptcy plan, approved by a Delaware judge in October, will see 98% of creditors recover at least 118% of their claim value in cash, calculated based on the value of their crypto holdings in November 2022, when FTX filed for bankruptcy. Nearly 94% of creditors in the “dotcom customer entitlement claims” group, representing $6.83 billion in claims, voted in favor of the plan.
The collapse of FTX in November 2022, following a liquidity crisis, marked one of the largest failures in the crypto industry. Founder and former CEO Sam Bankman-Fried resigned as the exchange filed for bankruptcy. Bankman-Fried was convicted in 2023 on seven counts of fraud and conspiracy and sentenced to nearly 25 years in prison. Alameda Research, FTX’s sister firm, also fell, with its CEO, Caroline Ellison, sentenced to two years for her role.
Kraken and BitGo, tasked with handling the upcoming payments, bring prior experience to the process. Kraken previously assisted in fund distribution to Mt. Gox creditors, while BitGo highlighted its history of securing billions in crypto assets for institutional clients. “We work hard to bring institutional-grade service to both retail and institutional clients,” said BitGo CEO Mike Belshe.
FTX has spent the past two years recovering assets to repay customers and creditors, including legal efforts to reclaim funds tied to political contributions and transfers made before its collapse. The company has warned creditors to remain cautious of phishing scams and unofficial platforms, stating that updates will only come from verified sources. Claimants must update their details on the FTX claims portal before Jan. 3. Transfers or sales of claims will be processed according to official records as of that date.
The initial payments mark a significant step in resolving FTX’s bankruptcy, offering relief to thousands of customers who have awaited recoveries since the exchange’s collapse.
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