As a seasoned crypto investor who lived through the tumultuous ride of FTX’s collapse and subsequent recovery, I find myself both relieved and intrigued by the recent developments. The fact that users are finally going to start receiving their bankruptcy distributions in stablecoins is a testament to the resilience of this industry.
2022’s FTX collapse victims are set to receive their bankruptcy settlements, offering the choice of getting payments in stable digital currencies via platforms like Kraken and BitGo.
According to the FTX estate’s announcement, their bankruptcy distribution plan will be activated on January 3, 2025, after it received approval from Judge John Dorsey of the U.S. District Court in October.
Sunil Kavuri, speaking on behalf of the primary creditors of FTX, has named Kraken and BitGo as the chosen intermediaries for the distribution process. He highlighted these platforms’ payment functionalities as the reason behind this selection. In terms of repayment options for customers, according to Kavuri, they will be able to choose to receive their refunds in stablecoins.
As an analyst, I can share that FTX has added two distribution partners – Bitgo and Kraken – to their FTX Claims Portal. A third partner is expected to join shortly.
— Sunil (FTX Creditor Champion) (@sunil_trades) December 16, 2024
According to Judge Dorsey’s ruling in Delaware, the proposed plan, which was approved in early October, allowed about 98% of creditors to receive approximately 118% of their original claim value. FTX’s choice to settle users with cash has faced criticism from Kavuri and other bankruptcy claimants.
In other words, a vast majority of creditors (approximately 94%) who had claims against the cryptocurrency exchange approved the proposed plan, totaling around $7 billion in claims as outlined in the restructuring strategy.
John J. Ray III, serving as the bankruptcy administrator, praised his temporary squad for successfully retrieving approximately $16 billion in assets and liquid cash for FTX’s creditors. Ray assumed the role of CEO towards the end of 2022, succeeding Sam Bankman-Fried. Firms under the FTX group, including Alameda Research, also faced insolvency, and some of Bankman-Fried’s key allies struck plea bargains with federal prosecutors for reduced penalties.
By November 2023, Bankman-Fried was convicted on seven counts and given a 25-year prison sentence for fraud. Under CEO Ray’s direction, the now defunct cryptocurrency exchange has been actively rebuilding the fragments of Bankman-Fried’s former crypto empire.
Over the last two years, our dedicated team has diligently and effectively been working tirelessly to recoup enormous sums of money, reaching this significant milestone. With the implementation of The Plan commencing in January 2025 and the initiation of distributions signifying it, we celebrate the remarkable achievement of our recovery endeavors.
John J. Ray III, FTX CEO
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2024-12-16 22:20