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FTX To Begin Repaying Customers in Early 2025—What You Need To Know
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Main points
- Former FTX customers with claims up to $50,000 will begin receiving repayments in early 2025.
- The repayment effective date is set for January 3, 2025, and payments are due within 60 days of the effective date.
- Although the bankruptcy plan was touted as a solution that would provide the vast majority of customers with 119% of their account value, the reality is that users will miss out on the huge gains in the crypto market since November 2022.
- Cryptocurrency exchange Kraken and cryptocurrency custody company BitGo will assist with the bankruptcy distribution.
more than two years later Cryptocurrency exchange FTX collapsessome of its clients will begin getting their money back early next year.
FTX announced on Monday that its restructuring plan to repay debtors will take effect on January 3, 2025, with actual payments due shortly thereafter.
“We are ready to begin distributing recoveries to all customers and creditors,” said FTX CEO John J. Ray III.
FTX repayment schedule
If certain conditions are met, the first customers will begin receiving payments within 60 days of the January 3rd effective date.
Initial repayments will be prioritized for the “convenience category”, primarily customers with claims not exceeding $50,000. Subsequent repayment groups, which may include larger debtors, will be announced later as the process unfolds.
To assist in distributing recovery funds, FTX has recruited cryptocurrency firms Kraken and BitGo.
FTX customers are finally being repaid, but is it enough?
Fortis submit Following the liquidity crisis, Chapter 11 bankruptcy protection will take place at the end of 2022. Earlier this year, its former co-founder and former CEO Sam Bankman-Fried Sentenced to 25 years in prison for his role in the fraud that occurred on the exchange.
After a lengthy bankruptcy and recovery process, FTX currently has $14.7 billion to $16.5 billion in funds to repay customers and other debtors. In October, a bankruptcy judge approved FTX’s reorganization plan, which includes a repayment schedule. 98% of users lose more than they (approximately 119%) of their claimed account value.
However, these repayment calculations are based on the dollar value of customer deposits as of November 2022. in other words, Customers have missed out Since then, Bitcoin and the larger cryptocurrency market have surged.
For example, Bitcoin (Bitcoin USD) traded for about $17,000 on November 11, 2022; today it is worth more than $105,000.
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