That’s when FTX expects to start paying out $16.5 million to customers

FTX Trading Ltd and its affiliated debtors have announced that they are close to completing key steps to implement their court-approved Chapter 11 reorganization plan.

Once completed, the plan will allow the company to distribute up to $16.5 billion in recovered funds to creditors and customers.

Chronology of distribution

In a Nov. 21 press release, John J. Ray III, CEO and Chief Restructuring Officer of FTX Debtors, expressed satisfaction with the progress made and stated that distributions are expected to begin in early 2025.

“The established timeline reflects the experience and continued work of the team of debtor support professionals, who have already recovered billions of dollars on behalf of FTX’s creditors and clients.”

Ray also noted that efforts to maximize recoveries are ongoing and that the company is focused on ensuring a speedy distribution process through partnerships with agents.

FTX also outlined updates on its planned distribution schedule. In early December, the failed exchange plans to finalize agreements with specialized distribution agents that will facilitate the global recovery process in supported jurisdictions. Customers will then be instructed to set up approved accounts with these agents through their existing customer portal.

The bankrupt stock exchange plans to announce the plan’s effective date at the end of December, conditional on a court order approving the amount of the disputed claims reserve. It also expects initial distributions to creditors of the plan’s convenience classes to occur within 60 days of the effective date.

The Reorganization Plan

The reorganization plan, approved by the United States Bankruptcy Court for the District of Delaware in October 2024, received overwhelming support from creditors. Under the plan, they will recover an average of 119% of the value of claims, and some may receive up to 140% in cash.

The exchange estimates total recoveries to be between $14.7 billion and $16.5 billion, citing assets recovered from entities such as the US Department of Justice and international regulators.

FTX filed for bankruptcy in late 2022, with the company’s downfall marked by high-profile criminal convictions. In November 2023, former CEO Sam Bankman-Fried was convicted on charges including fraud and conspiracy and sentenced to nearly 25 years in prison.

In 2024, co-CEO Ryan Salame was sentenced to 7.5 years in prison, while Caroline Ellison, former CEO of Alameda Research, received a two-year prison sentence. Former executives Nishad Singh and Gary Wang avoided jail altogether.

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