The post FTX Payout Plan Officially Takes Effect Today, A Key Milestone for Creditors appeared first on Coinpedia Fintech News
After a lenghty and demanding process following its dramatic collapse, the FTX repayments will be starting today with $16B in total to redistribute. This is a key milestone for creditors waiting to recover their assets. The FTX estate, which manages the bankruptcy proceedings of the collapsed crypto exchange, had stated in December that it plans to begin repayments within 60 days of the effective date.Â
Focus On Convenience Classes
Although the estate estimates that total distribution will range between $14.7 billion and $16.5 billion, the first payout will be lower, focusing on convenience classes with allowed claims of $50,000 or less.
These creditors are expected to receive approximately 119% of their allowed claim amount, including principal and accrued interest, within 60 days. As per the plan, this amounts to roughly $1.2 billion in total.
Sunil Kavuri, a prominent advocate for FTX creditors shared in an X post that creditors with claims exceeding $50,000 will receive a share of a separate $10.5 billion pool. The distribution timeline for this group will take longer.
BitGo and Kraken have been designated to manage initial distributions to retail and institutional customers in supported jurisdictions.
Key Requirements To Be Met
He also shared that the FTX customers must complete KYC verification, submit tax forms through the FTX Debtors’ Customer Portal, and choose either BitGo or Kraken as their distribution manager. To be eligible to receive a distribution on the initial distribution date, customers and other creditors are required to complete the above-mentioned steps, prior to the distribution record date.
Notably, analysts estimate that $2.4 billion may flow back into crypto markets following the plan’s execution. The analysts note that $3.9 billion of total claims were acquired by credit funds, which are unlikely to reinvest in crypto assets. Moreover, 33% of remaining claims belong to sanctioned countries, insiders, or individuals without KYC verification who may be unable to claim funds.
