FTX reorganization plan begins; users cautioned on phishing scams

The reorganization plan for the bankrupt cryptocurrency exchange FTX, which began its bankruptcy proceedings in November 2022, went into effect on January 3. This will enable users to begin receiving repayments.

The FTX Debtors Plan of Reorganization is effective today, January 3, 2025. Today is also the initial distribution record date for holders of allowed claims in the Plan's Convenience Classes. Separate record and payment dates for other classes of claims will be announced later.

— FTX (@FTX_Official) January 3, 2025

In a post on X on January 3, FTX debtors cautioned users requesting funds to be vigilant against phishing emails that appear to come from the exchange.

Customers must submit claims to receive reimbursements within 60 days

To be eligible for reimbursement, customers must have submitted a claim via FTX’s official website. The exchange stated that the first group of users should receive their payments within 60 days.

Under the company’s plan, an initial set of “convenience classes” will be prioritized for repayment, including those claiming $50,000 or less. The plan, which was approved in October, indicated that 98% of users could expect to receive 119% of the declared value of their funds.

The repayment process could mark the final chapter in the FTX saga, which began with the exchange’s bankruptcy filing in November 2022 and included the imprisonment of several executives for their role in defrauding users.

FTX users criticize the reorganization plan while legal outcomes unfold

Still, not all FTX users support the plan. Many creditors have criticized the approach, particularly the decision to base reimbursements on the prices of cryptocurrencies held by the exchange at the time of its bankruptcy in 2022. Bitcoin’s price has surged by more than 400% since then, reaching $98,697 at publication.

Among the exchanges’ executives indicted in connection with the exchange’s collapse, only two avoided prison: former engineering director Nishad Singh and co-founder Gary Wang. Former CEO Sam Bankman-Fried (SBF), former Alameda Research CEO Caroline Ellison, and former FTX Digital Markets co-CEO Ryan Salame have all been sentenced to prison terms, although SBF has appealed his conviction.

In December, crypto firms BitGo and Kraken announced they would assist in distributing recovery funds to FTX users. If all eligible users file complete claims, the exchange is expected to pay out approximately $16 billion.

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