The FTX bankruptcy estate has announced an updated timeline for creditor and former customer reimbursements, aiming to finalize claims by January 2025.
Initial payouts are expected to begin in March 2025, according to a 21 November 2024 statement from the defunct crypto exchange.
To streamline the process, FTX plans to collaborate with distribution agents starting in December 2024. These agents will manage the payout system and oversee the customer reimbursement portal.
FTX CEO Vows To Return Funds Swiftly
Interim CEO John J Ray III expressed the estate’s commitment to returning funds swiftly.
“While we continue to take actions to maximize recoveries, we are full steam ahead to reach arrangements with our distribution agents and return proceeds to creditors and customers as quickly as possible,” Ray said.
Although the reorganization plan received court approval in October, it faced opposition from some creditors. A group led by Sunil Kavuri criticized the plan. He argued that reimbursement amounts were calculated based on the petition date, when cryptocurrency prices were significantly lower.
For example, Bitcoin was trading at around $16,000 at the time, compared to its current value.
#FTX to start Creditor Payment!
Two years after the implosion the blockchain, FTX says it’s ready to start shelling out $16.5B to jilted users.
But here’s the kicker: payouts are locked to Nov. ‘22 crypto prices – Bitcoin at $20K, ETH at $1.2K – leaving users wrecked. pic.twitter.com/s7ZVdq9RB8
— MemeWhale
(@meme__whale) November 22, 2024
In its quest to recover assets, the FTX estate has pursued legal action against various parties. Notably, a lawsuit was filed against KuCoin to recover $50 million in assets allegedly locked on the exchange since FTX’s collapse in 2022.
Similarly, in November 2024, the estate filed a complaint against Crypto.com to reclaim $11 million in funds.
High-profile individuals and companies have also been targeted. On 8 November 2024, FTX initiated legal proceedings against Anthony Scaramucci and his firm, SkyBridge Capital. It is seeking to recover $100 million spent on sponsorships and investments involving former CEO Sam Bankman-Fried.
Binance and its founder, Changpeng Zhao, are facing a $1.8 billion lawsuit. This is over allegations of receiving $1.76 billion in fraudulent transfers prior to FTX’s downfall.
FTX Settles Lawsuit With Bybit, Securing $228M
In October, the FTX bankruptcy estate reached a $228 million settlement with cryptocurrency exchange Bybit to recover funds for repaying former FTX customers and creditors.
Under the terms of the settlement, FTX will retrieve $175 million in digital assets held by Bybit, along with an additional $53 million in BIT tokens, which will be sold to Mirana Corp, Bybit’s investment arm.
FTX originally launched a $1 billion lawsuit against Bybit and Mirana in late 2023, alleging that these entities used special privileges and “VIP” access to preemptively withdraw $327 million in digital assets and cash in the days leading up to FTX’s downfall.
Attorneys for FTX’s estate argued that Bybit and Mirana received priority withdrawal access from FTX executives, potentially influencing the estate’s financial losses during its collapse.
The approval of FTX’s reorganization plan earlier in October by Judge John Dorsey provided a boost to these recovery efforts.
Additionally, FTX investors recently dismissed their lawsuit against Sullivan & Cromwell, the law firm that represented the cryptocurrency exchange, after accusing it of complicity in the exchange’s alleged fraudulent activities.
Disclaimer: Crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.