Bankrupt crypto exchange FTX announced today that its court-approved reorganization plan will be effective in January 2025. Next month, FTX debtors will finalize arrangements with distributors to reimburse old users, especially those overseas.
The reorganization plan has sparked discontent among creditors, but FTX is working to maximize recovered assets.
Reorganization at FTX
In a recent press release, FTX claimed that it’s almost ready to proceed with the court-approved reorganization plan. Under this plan, FTX debtors expect to make final arrangements with funds distributors in December and start reimbursing claimants in January 2025.
“We are pleased to announce that we will begin distributing proceeds in early 2025. While we continue to take actions to maximize recoveries, we are full steam ahead to reach [these] arrangements… and return proceeds to creditors and customers as quickly as possible,” said John J. Ray III, CEO and Chief Restructuring Officer of the FTX Debtors.
Things seem to be wrapping up in the FTX saga, now that its infamous founder, Sam Bankman-Fried, is behind bars. Bankman-Fried is currently appealing his criminal conviction, but a number of forces are arrayed against him. For one, FTX co-founder Gary Wang received no jail time due to his extensive testimony against the former CEO.
Additionally, although the SDNY US Attorney’s office expects a reduction in crypto crackdowns under Trump’s administration, there’s an exception for Bankman-Fried. Prosecutors wish to finalize a definitive conviction on this high-profile case despite changes in leadership.
His criminal behavior at FTX was a national headline, and law enforcement wants its own notoriety.
Nonetheless, the process has still generated frustration. FTX creditors will reportedly recover between 10-25% of their defrauded holdings, which has sparked discontent. The exchange, for its part, has been working to deliver as much as possible.
It settled a lawsuit with ByBit to reduce overhead costs and has opened new suits to recover other losses. Its FTT token also surged in value, possibly providing liquidity.
Ultimately, this announcement hasn’t changed the fundamental plan for reorganization at FTX. The defunct exchange will continue its attempts to recover assets, and will soon begin redirecting these to old users.
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