FTX have announced it will begin repaying creditors with claims under $50,000 on February 18, 2025. The company expects to complete these initial distributions within one to three business days of the start date.
The distribution marks the first phase of FTX’s Chapter 11 Plan of Reorganization, focusing on what the company calls the “Convenience Classes” of claims. To handle the payments, FTX has partnered with two cryptocurrency firms, BitGo and Kraken, who will serve as Distribution Service Provider
The repayment amounts will be calculated based on the value of customer deposits as of November 2022, when Bitcoin was trading at approximately $17,000. Creditors will receive their original deposit amount plus 9% annual interest, regardless of current cryptocurrency values.
John J. Ray III, Plan Administrator of the FTX Recovery Trust, called the start of distributions “an incredible and important milestone for FTX.” He pointed to the work done over the past 28 months to recover assets and coordinate the repayment process.
How to Claim Your FTX Funds
To receive their funds, creditors must complete several requirements. These include logging into the FTX Customer Portal, finishing Know Your Customer (KYC) verification, submitting required tax forms, and creating accounts with either BitGo or Kraken.
The process faces some hurdles. Currently, unverified claims total more than $345 million, with many creditors yet to complete their KYC verification. This could delay some payments until the verification process is complete.
FTX has started sending email notifications to eligible creditors, providing instructions for the repayment process. The company emphasizes that once funds are transferred to the Distribution Service Providers, individuals become responsible for their own funds.
For creditors with transferred claims, distributions will only be made to transferee holders whose claims have been processed and recorded by the Notice and Claims Agent. These claims must also complete a 21-day notice period without objection.
The company has implemented security measures to protect creditors during the distribution process. FTX warns users to be aware of phishing emails that may appear to be from the company and reminds customers that it will never ask them to connect their wallets.
FTX Digital Markets Ltd. will handle communications separately for customers who chose to have their claims administered through that entity. The company plans to announce payment dates for other classes of claims in the future.
FTX Fund Distribution Plan
The distribution plan represents a coordinated effort between multiple professional services firms. Sullivan & Cromwell LLP serves as legal counsel, while Alvarez & Marsal North America, LLC acts as financial advisor. Perella Weinberg Partners LP, Quinn Emanuel Urquhart & Sullivan, LLP, and Landis Rath & Cobb LLP provide additional professional support.
Creditors can find more information about the distribution process on the FTX support website. Court filings, including the Plan and other documents related to the proceedings, remain available through the official bankruptcy case portal.
FTX continues to pursue the recovery of outstanding assets while executing these distributions. The company maintains its commitment to processing all valid claims according to the approved plan.
The February 18 distribution date arrives after months of preparation and coordination between FTX and its service providers. This initial phase targets smaller claims first, with larger claim distributions to follow in subsequent phases.
BitGo and Kraken have confirmed they received the funding necessary to begin distributions. Both companies will use their existing infrastructure to process payments efficiently and securely.
FTX emphasizes that customer support for distribution-related questions should be directed to the chosen Distribution Service Provider once funds have been transferred to customer accounts.
