FTX To Initiate Distributions By March 2025 With Kraken And BitGo

By: Eva Baxter

FTX, a once-prominent crypto exchange that faced a major collapse in November 2022, has announced that its reorganization plan will take effect on January 3, 2025. The plan sets the stage for initial distributions to creditors within 60 days from this date. In an effort to manage the distribution process efficiently, FTX has partnered with service providers Kraken and BitGo. These partnerships are expected to ensure a secure and effective distribution across supported jurisdictions, including the option to receive distributions in stablecoins.

The initial round of distributions applies to those creditors classified under the plan's "Convenience Classes." FTX has indicated that distinct payment dates will be announced for other creditor classes. Furthermore, FTX plans to disclose additional service providers via its customer portal and official communication channels to facilitate this process further.

John J. Ray III, CEO of FTX, expressed confidence in the company's ability to begin the distribution of recoveries to customers in a timely manner. He urged customers to fulfill all necessary requirements and steps through the FTX Debtors' Customer Portal to ensure prompt receipt of distributions. To be eligible for the initial distribution, creditors must complete key prerequisites, including KYC validations, tax submissions, and onboarding with distribution partners.

While these proceedings offer hope to creditors, they must remain wary of phishing scams, as FTX emphasized that formal communications would only occur through verified channels. The exchange stressed its commitment never to request sensitive financial details or wallet connections outside the official portal. The approved $16.5 billion recovery plan by US Bankruptcy Judge John Dorsey may ultimately downscale to $14.7 billion after cash conversion.

The collapse of FTX was triggered by the mismanagement of customer funds by Sam Bankman-Fried and other top executives, leaving nearly 9 million customers and investors with heavy financial losses. The anticipated distributions stand as a significant step forward in remedying the impacts of what has been one of the most consequential crypto collapses in history.