Thomas Daniels
Beginning on January 3, 2025, FTX creditors affected by the failure of the cryptocurrency exchange in 2022 will start receiving bankruptcy dividends. The FTX estate announced that users would be able to receive payouts in stablecoins through Kraken and BitGo thanks to the distribution method, which was approved by U.S. District Judge John Dorsey in October.
The formal partners for managing repayments are Kraken and BitGo, according to Sunil Kavuri, a spokesman for FTX’s biggest creditor group. One important consideration in the selection process, according to Kavuri, was their strong payment capabilities. In an effort to make repayments more convenient, he also affirmed that creditors would have the choice to receive payouts in stablecoins.
With 94% of creditors voting in favor, the bankruptcy plan was adopted with resounding support. Almost $7 billion in claims are represented by this group of creditors, and 98% of claimants will get 118% of their claim value as a result of the court’s decision. However, other claimants, notably Kavuri, criticized the choice to give cash repayments priority.
FTX’s CEO since late 2022 and bankruptcy administrator, John J. Ray III, commended his staff for recouping about $16 billion in cash and assets to pay creditors. Sam Bankman-Fried, the creator of FTX, was succeeded by Ray, who assumed responsibility for rebuilding the business following its abrupt demise. Bankman-Fried and a number of high-ranking associates were subject to legal action, and subsidiaries such as Alameda Research also failed.
In November 2023, Bankman-Fried was found guilty of seven fraud offenses and given a 25-year prison term. Over the course of two years of intense work, Ray’s leadership made tremendous progress in restructuring and optimizing asset recovery for creditors.
“This milestone reflects the extraordinary commitment of our professionals, who have worked tirelessly to recover billions of dollars for creditors,” Ray said. “The plan’s implementation in January 2025 and the commencement of payouts underscore the success of these recovery efforts.”
One of the most important steps in settling claims resulting from one of the biggest financial meltdowns in cryptocurrency history is FTX’s bankruptcy distribution plan.
