FTX will distribute funds by January 2025, with account and verification requirements for customers and creditors.
The trading platform issued a press release revealing that the implementation of this reorganization plan will enable the platform to initiate distributions to both its customers and its creditors.
Following the announcement that it will finalize its arrangements with its specially designated distribution agents before the deadline in January 2025, the exchange announced these plans.
Consumers must establish an approved account with the distribution agents to be eligible for payouts. FTX has confirmed that it will announce the specific dates from which it will begin the distribution in January.
We are making this announcement in accordance with a court order. The notification provided specifics regarding the timing of the initial distribution, which is approximately sixty days after the approval of the court order.
Additionally, creditors must “complete KYC verification and submit the required tax forms prior to the distribution record date.” This is in addition to the requirement that they open accounts with the distributing agents.
The court approved the bankruptcy plan in October, leading to the release of this most recent information. Following the implementation of this reorganization strategy, FTX will disperse more than $6.6 billion to its clientele.
Because it received approval from around 96% of all creditors, this plan is considered one of the most comprehensive proposals for creditor repayment. The approved plan will return more than one hundred percent of the locked-up cash, but the payout will be in United States dollars.
The Rise and Fall of FTX
Numerous important parties involved in the bankruptcy process, including Sunil Kavuri, are of the opinion that this is a significant ruboff. By its peak popularity, FTX Derivatives Exchange was the fastest-growing trading platform in the industry. On the other hand, Sam Bankman-Fried (SBF), who was a co-founder and a former CEO, developed a backdoor that allowed him to steal approximately $8 billion in client cash.
Frivolous gifts and investments created a significant hole in the FTX balance sheet, prompting the company to file for bankruptcy upon discovery. Bankman-Fried received a 25-year prison sentence for his role in the company’s failure.
Two other executives, Ryan Salame and Caroline Ellison, received sentences of 7.5 and 2 years in prison, respectively, for their illegal activities. Even though Gary Wang was the one who developed the software that assisted SBF in stealing the monies, he managed to get out of prison. The community has responded positively to the FTX restructuring plan, considering it fair.