What creditors of FTX, the cryptocurrency exchange that collapsed in 2022, will start to get their bankruptcy payouts is January 3, 2025, according to the FTX estate. In October, U.S. District Judge John Dorsey cleared the way for the plan to disburse crypto users who had chosen to opt for payments using stablecoin payments via Kraken and BitGo.
Spokesperson for FTX’s biggest creditor group Sunil Kavuri, also confirmed that they have partnered with Kraken and BitGo for their ability to make payments. Customers will be able to receive repayments in stablecoins – an alternative to cash – Kavuri added.
FTX Creditors to Receive 118% Payout Amid Recovery
Court rulings say creditors will get 118% of their claim value under an approved bankruptcy plan. It followed 94 percent of creditors, whose almost $7 billion in claims, voting in favor of the plan. But Judge Dorsey’s ruling in Delaware allowed its implementation, despite criticism from some creditors of the formula’s payout.
John J. Ray III, FTX’s bankruptcy administrator and CEO, praised his team for recovering ‘approximately $16 billion in assets and cash’ for creditors. After the collapse of the exchange in late 2022, Ray took over as leader, replacing founder Sam Bankman-Fried. Related entities like Alameda Research, also failed in the fallout.
Bankman-Fried was convicted on seven counts of fraud in November 2023 and sentenced to 25 years in prison after the firm’s downfall. Several of his close associates pleaded guilty to federal charges in order to get reduced sentences.This is just a major piece of one effort to restore the remains of FTX’s once overwhelming crypto empire.
Ray has helped lead the estate to maximize recoveries for affected users, who have waited since the company’s collapse rattled the crypto world.And to help creditors make smooth payments, FTX enlisted Kraken and BitGo onboard, signalling a step in the right direction when it comes to one of the biggest scandals in cryptocurrency.
For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point. The Plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of the recovery efforts. John J. Ray III, FTX CEO
