FTX Resumes Customer Repayment for Convenience Class
Defunct cryptocurrency exchange FTX has restarted the process of repaying its customers, specifically targeting the convenience class in the initial distribution. The FTX bankruptcy estate began its reorganization plan on January 3rd and will now fully resume the repayment process for affected investors who filed for bankruptcy in November 2022.
This resumption is a crucial stage in the process, which has undergone various legal proceedings. The initial phase will focus on the holders of allowed claims in the convenience distribution.
Repayment Process in Full Swing
With the reorganization plan now in full effect, the estate has called on the convenience class of allowed claims to complete the pre-distribution process. The convenience class refers to a group of FTX’s creditors who have claims worth less than $50,000 in the bankruptcy proceeding.
It is important to note that during this stage, distribution claimants must meet KYC (Know Your Customer) requirements, submit a tax form, and choose a distribution service provider. The convenience creditors have until January 20th to meet these pre-distribution criteria; otherwise, they will miss out on the initial repayment process.
Any claimant in this category who fails to meet the requirements will receive reimbursement in the subsequent distribution process. The repayment process for this class will run for 60 days from the start date, and creditors are expected to receive a total of $1.2 billion.
Convenience Creditors to Receive 119% Repayment
According to the court ruling, the FTX bankruptcy estate will fully repay creditors in the convenience class and provide additional incentives. Claimants in this category will receive 119% of the value of their assets on the day the defunct exchange filed for bankruptcy.
It is worth noting that Kraken and BitGo are the only distribution service providers available. These exchanges will allow users to withdraw funds in US dollars or convert their claims into cryptocurrencies.
Details for other creditor classes are currently unavailable. However, it is expected that the process will resume immediately after the distribution to the convenience creditor class.
In December, FTX announced that it had raised over $14 billion and intends to fully compensate its users.
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