FTX to Start Creditor Repayments on January 3
FTX will begin creditor repayments on January 3, 2025, through BitGo and Kraken, marking a key step in resolving its two-year bankruptcy case.
FTX has confirmed that its Chapter 11 reorganization plan will officially take effect on January 3, 2025, with repayments to creditors expected within 60 days. The company has partnered with BitGo and Kraken to manage the distribution process, finally offering hope to those impacted by its collapse.
According to the official notice, eligible creditors must submit tax documentation and register with either BitGo or Kraken to receive their funds. If claims were transferred, payments will go only to the official transferee listed as of January 3. An additional 21-day period will allow objections before distributions begin. Further updates for other creditor groups are expected over the coming months.
FTX creditors can choose to receive their repayments via USD wire transfer or stablecoins. Much of the repayment funds come from legal actions against other platforms. For example, FTX recently recovered $35 million from Gate.io after filing a lawsuit to reclaim $40 million in crypto assets. Similarly, FTX has pursued Binance and its former CEO Changpeng Zhao, seeking $1.8 billion in allegedly misappropriated funds.
Following these announcements, FTX’s native token, FTT, surged by nearly 10%, hitting its highest value in 10 months. A similar price jump occurred in November when the reorganization plan received court approval. However, FTT remains 96% lower than its all-time high from 2021, highlighting the long-term impact of the exchange's collapse.
FTX’s reorganization plan, approved by the bankruptcy court in October, aims to repay about 98% of creditor claims, including users in the "convenience class" with claims under $50,000. These smaller creditors are expected to be among the first to receive repayments once the plan is implemented.
The downfall of FTX began in November 2022, following a liquidity crisis and the resignation of founder Sam Bankman-Fried. Bankman-Fried was sentenced earlier this year to 25 years in prison for orchestrating the fraud. His close associate Caroline Ellison, former CEO of Alameda Research, received a reduced sentence of 24 months due to her extensive cooperation with prosecutors. Similarly, FTX co-founder Gary Wang avoided jail time entirely for his role in the case after assisting authorities.
In a related move, the US government transferred $33.6 million worth of crypto seized from FTX to various wallets earlier this month, sparking speculation about a possible sell-off.
FTX’s reorganization marks a major step toward closure for creditors, with the company actively recovering assets to distribute among its users. The two-year saga is finally reaching its final stages, offering some relief to those who lost funds during the exchange's collapse.
