FTX Sets Timeline for Creditor and Client Reimbursement Payouts

After two years of bankruptcy proceedings, FTX has announced a timeline for creditor and customer reimbursements, with payouts expected to begin in March 2025. The timeline for the reimbursement process, which is scheduled to be finalized by January 2025, was revealed in a Nov. 21 update from the bankrupt crypto exchange.

FTX stated that it will begin working with distribution agents in early December to facilitate the payout process and manage the customer reimbursement portal. John J. Ray III, the interim CEO overseeing FTX's bankruptcy, commented, "While we continue to take actions to maximize recoveries, we are full steam ahead to reach arrangements with our distribution agents and return proceeds to creditors and customers as quickly as possible."

Ongoing Legal Battles and Discontent with Reorganization Plan

Despite the approval of FTX's reorganization plan by a U.S. judge in October, not all creditors are satisfied with the proposed payout structure. Some creditors, led by Sunil Kavuri, have voiced concerns that the reimbursement amounts are based on the petition date when digital asset prices were much lower, such as Bitcoin trading at around $16,000. As a result, these creditors have challenged the payout terms, leading the FTX estate to pursue further litigation in a bid to recover more assets.

A Flood of Lawsuits to Recover Assets

In recent months, the FTX bankruptcy estate has ramped up its legal efforts to reclaim assets. In October, the estate filed a lawsuit against crypto exchange KuCoin, seeking to recover approximately $50 million in assets allegedly locked on the platform since FTX's collapse in 2022. More recently, in November 2024, the estate filed a complaint against Crypto.com, aiming to recover $11 million in funds.

Additionally, FTX initiated a lawsuit in Nov. 8, 2024, against Anthony Scaramucci and his firm SkyBridge Capital to recover $100 million spent on sponsorship and investment deals made between Scaramucci and FTX's former CEO, Sam Bankman-Fried.

Perhaps the most significant legal action, however, is the $1.8 billion lawsuit filed against Binance and its CEO, Changpeng Zhao. FTX alleges that Binance and Zhao received approximately $1.76 billion in fraudulent transfers from FTX before the exchange’s collapse in 2022.

As these legal battles continue, FTX creditors and customers are left waiting for reimbursement, with the process expected to unfold in 2025. The outcome of these lawsuits could further impact the amount and timing of the payouts.