The long-awaited resolution for nearly $16 billion owed to users and customers of the now-defunct crypto exchange FTX is on the horizon. The estate responsible for recovering these funds has delineated the forthcoming steps and timeline for distribution, marking a crucial phase in the process.
FTX Nears Completion of Chapter 11 Plan
In a recent announcement, FTX revealed its progress towards completing the essential prerequisites for implementing its Court-approved Chapter 11 Plan of Reorganization. This development signifies a pivotal moment in the journey to begin distributions to creditors and customers.
John J. Ray III, the Chief Executive Officer and Chief Restructuring Officer of the FTX Debtors, expressed confidence in the upcoming distributions. He stated that the distribution of proceeds is expected to commence in “early 2025.” According to Ray, this timeline is indicative of the diligent efforts made by the team working on behalf of the creditors and customers, who have successfully recovered “billions of dollars to date.” He reassured stakeholders of the team’s unwavering commitment to maximizing recoveries and expediting the return of funds through distribution agents.
Upcoming Steps for Distribution
FTX has provided updates regarding the anticipated timetable for these distributions. By early December, the estate plans to finalize agreements with specialized distribution agents who will facilitate the global recovery distribution to customers in supported jurisdictions.
At this juncture, FTX will issue detailed instructions to affected customers on establishing an approved account with these agents via the existing customer portal. It is crucial for customers to stay informed and ready to act promptly.
What Customers Must Know
By the end of December, FTX aims to announce the exact effective date for distributions, contingent upon a Court Order approving the Disputed Claims Reserve Amount—a critical step as outlined in the Confirmation Order. The current expectation is for the Plan to become effective in early January 2025.
Following this, the initial distribution will be made to holders of allowed claims in the Plan’s Convenience Classes within 60 days. It is important to note that the distribution record date will coincide with the effective date, necessitating swift action from customers. To qualify for the initial distribution, customers must establish an approved account with a distribution agent, complete Know Your Customer (KYC) verification, and submit the necessary tax forms before the distribution record date.
Furthermore, claims traders should be aware of specific provisions in the Plan regarding trades made within 45 days prior to the distribution record date. Claims traded during this period may not appear on the claims register by the end of business on the distribution record date, potentially resulting in distributions being made to the original claim holders instead of the current traders.
FTT Price Reacts to Distribution Announcement
As of the time of writing, FTX’s native token, FTT, is trading at $2.36, reflecting a substantial surge of nearly 10% in the past 24 hours. Over a more extended timeframe, the token has posted impressive gains, rising approximately 40% over the past fourteen days and 18% over the past thirty days. This upward trend aligns with the broader market rally following recent geopolitical events.
Data from CoinGecko further indicates that FTT has experienced a significant increase in trading volume over the past 48 hours, surging by 38%, with over $135 million traded during this period. However, it is important to note that FTT’s current price remains significantly below its all-time high of $84, reached during the bull market of September 2021, marking a decline of over 97% from its peak value.
The daily chart continues to show an uptrend in FTT’s price, reflecting the market’s response to the distribution announcements and ongoing recovery efforts.
