Over the weekend, several cryptocurrency influencers, including the well-known AI-powered crypto personality AIXBT, mistakenly claimed that payouts from bankrupt exchange FTX would begin in January. These false reports generated excitement about a potential market rally in 2025, fueled by rumors of a $16 billion disbursement.
FTX Confirms No Payments Before March 2025
Despite the speculation, FTX’s official timeline contradicts these claims. According to the company, no payments will be issued before March 2025. The firm clarified that its reorganization plan will commence in January, with the first round of payouts expected 60 days afterward.
Sunil Kavuri, an advocate representing FTX creditors, also refuted the January reimbursement rumors. He confirmed that payouts would not occur during that timeframe, nor would a $16 billion distribution take place. Kavuri highlighted that FTX’s current cash reserves stand at approximately $13 billion, with an anticipated increase to $14 billion by March 2025. Additional contributions from lawsuits and venture capital investments could add an estimated $5–7 billion.
Overview of FTX’s Bankruptcy and Reorganization Plan
FTX has been navigating a lengthy bankruptcy process, which culminated in October with the approval of a $16.5 billion reorganization plan. This plan aims to compensate users affected by the platform’s collapse.
Initial Payouts Prioritize Smaller Creditors
The company stated that the first round of payments will focus on creditors with claims under $50,000. These smaller claims represent over 90% of all claimants. Reimbursements will be based on the value of crypto holdings at the time of FTX’s bankruptcy filing in November 2022. At that time, Bitcoin and Ethereum prices were approximately $20,000 and $1,200, respectively. Given the current values of $100,000 for Bitcoin and over $3,000 for Ethereum, the reimbursement amounts will be comparatively lower.
Partnerships to Streamline Distribution
FTX has partnered with BitGo and Kraken to facilitate a smooth payout process. These platforms will manage the distribution of funds to individual and institutional creditors across supported regions using stablecoins.
The Collapse of FTX: A Dark Chapter in Crypto History
FTX’s downfall in late 2022 had a seismic impact on the cryptocurrency sector. The exchange faced a liquidity crisis triggered by massive customer withdrawals, which exposed significant mismanagement under former CEO Sam Bankman-Fried.
U.S. prosecutors revealed that Bankman-Fried had misused customer funds to cover losses at Alameda Research while making substantial political donations. These actions led to criminal convictions for Bankman-Fried and several associates, including Ryan Salame and Caroline Ellison, marking one of the most scandalous episodes in crypto history.
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