The bankrupt cryptocurrency exchange FTX announced today that the reorganization plan approved by the court will take effect in January 2025. Next month, FTX debtors will finalize agreements with distributors, particularly to compensate overseas users.
The reorganization plan has caused dissatisfaction among creditors, but FTX is working to maximize the recovered assets.
FTX case is in the final stage of resolution
In a recent press release, FTX claimed that it is almost ready to proceed with the reorganization plan approved by the court. Under this plan, FTX debtors expect to finalize agreements with distributors in December and start compensating claimants in January 2025.
"I'm pleased that we will be able to start distributions in early 2025. We continue to take steps to maximize recoveries, and we are working hard to finalize these arrangements and return value to creditors and customers as soon as possible." – John J. Ray III, CEO of FTX debtors and Chief Restructuring Officer
The FTX case seems to be in the final stage of resolution, as the notorious founder Sam Bankman-Fried has been incarcerated. Bankman-Fried is appealing his criminal conviction, but various forces are against him. Meanwhile, FTX co-founder Gary Wang avoided jail time due to his extensive testimony against the former CEO.
Additionally, the U.S. Attorney's Office for the Southern District of New York (SDNY) expects a reduction in cryptocurrency crackdowns under the Trump administration, but Bankman-Fried is an exception. The prosecution wants to secure a definitive guilty verdict in this high-profile case. Despite the change in leadership, they want to make a name for themselves with his criminal conduct at FTX.
His crimes at FTX were national headlines, and law enforcement agencies want to become famous for it.
Nevertheless, this process has continued to cause frustration. FTX creditors are reported to recover 10-25% of their defrauded holdings, which has caused dissatisfaction. The exchange is working to deliver as much as possible.
FTX has settled its lawsuit with ByBit, reducing indirect costs, and filed new lawsuits to recover other losses. The FTT token has also seen a sharp rise in value, potentially providing liquidity.
Ultimately, this announcement did not change the fundamental plan for FTX's reorganization. The bankrupt exchange will continue to attempt asset recovery and soon return them to former users.
