In a significant development for those affected by the FTX collapse in 2022, the company is set to commence bankruptcy payouts on January 3, 2025. The payouts will be facilitated by Kraken and BitGo, with users having the option to receive their funds in stablecoins. This follows the approval of the bankruptcy disbursement plan by U.S. District Judge John Dorsey in October.
Sunil Kavuri, spokesperson for FTX’s largest creditor group, emphasized the payment capabilities of Kraken and BitGo as the reason for their selection as distribution partners. The plan, which was ruled on by Judge Dorsey in Delaware, saw 98% of creditors approved to receive 118% of their claim value. However, FTX’s choice to repay in cash initially faced criticism from Kavuri and other claimants.
Nevertheless, court documents reveal that a staggering 94% of creditors with claims against the crypto exchange voted in favor of the plan. This group represents nearly $7 billion in claims as per the reorganization plan.
Bankruptcy administrator John J. Ray III has been leading efforts to recover assets and cash for FTX creditors. Since taking over as CEO in late 2022, replacing the disgraced Sam Bankman-Fried, Ray’s team has managed to recover around $16 billion. The collapse of associated companies like Alameda Research and the legal woes of Bankman-Fried’s associates, who entered plea deals with federal prosecutors, have been part of the complex aftermath.
With the start of distributions in January 2025, it marks a crucial milestone in the arduous process of rebuilding and restitution. Ray himself has stated that the team’s meticulous work over the past two years to recover billions has led to this moment, and the effectiveness of the plan and the onset of payouts are a testament to the remarkable success of the recovery endeavors.
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