FTX Begins Repaying Customers After Two-Year Bankruptcy

FTX, the once-thriving cryptocurrency exchange, has initiated the process of repaying customers affected by its 2022 bankruptcy. The first distributions began on Tuesday, with a select group of convenience class customers, those with claims up to $50,000, expected to receive their funds within the next one to three business days. The next scheduled distribution is set for April 11, as the exchange works diligently to fulfill its obligations to creditors.

John J. Ray III, the plan administrator of the FTX recovery trust and CEO of FTX Debtors, expressed satisfaction with the start of distributions and the establishment of a timeline for subsequent payments. He acknowledged the complexity of the process and thanked customers and creditors for their patience and cooperation. Ray emphasized that the recovery efforts are ongoing, and the intention is to continue returning funds to additional claim classes.

The distributions will be made available through the digital asset platforms BitGo and Kraken, providing a means for customers to access their returned funds. This step is part of the ongoing efforts to resolve the issues stemming from FTX's bankruptcy.

The approval of FTX's bankruptcy plan by a Delaware judge occurred in October 2024, marking a significant milestone two years after the exchange's initial bankruptcy filing. According to the plan, 98% of creditors are expected to receive at least 118% of their claim value in cash. This decision has faced criticism for not repaying in cryptocurrencies at their value during the bankruptcy filing in 2022.

Sam Bankman-Fried, the former CEO of FTX, was convicted in November 2023 on several criminal charges including wire fraud and conspiracy, resulting in a nearly 25-year prison sentence. The collapse of FTX also led to the downfall of its sister trading firm Alameda, with CEO Caroline Ellison receiving a two-year sentence for her involvement.