- FTX creditors may receive payouts in 2024 following a resolution from the first creditor meeting
- Meeting minutes suggest payouts could start this year, pending the successful completion of KYC documentation
- Payouts are expected to match the fiat value of FTX customers’ holdings at the time of bankruptcy in November 2022
FTX creditors could receive their payouts this year according to plans drawn up by FTX Digital’s Joint Official Liquidators in the Bahamas. According to the minutes from the first FTX creditor meeting, which took place on March 15, payouts could begin this year pending the successful completion of Know Your Customer (KYC) documentation. FTX customers are in line for payouts equal to the fiat value of their holdings at the time the exchange went into bankruptcy in November 2022.
Bankruptcy Taking Place in US and Bahamas
The meeting notes reveal that the Joint Official Liquidators (JOLs) of FTX determined that separating the company’s affairs from Chapter 11 Debtors would not benefit creditors due to commingled assets, leading to the approval of a Global Settlement Agreement (GSA) in January this year.
The GSA has allowed access to the entire FTX estate to benefit creditors, with the minutes noting that the FTX bankruptcy comprises two simultaneous processes: the Chapter 11 bankruptcy, which is being handled in a Delaware court, and the official liquidation process of FTX Digital, FTX’s Bahamian subsidiary, taking place in the Bahamas.
While FTX customers can only choose one of the liquidation processes, both arms of the estate have “committed to collaborating closely,” hopefully ensuring no roadblocks on the way to asset recovery.
Claims Deadline to be Extended
The notes also reveal that the deadline for claims is expected to extend to at least June 2024, but if all KYC documentation is completed in good time, then payouts may begin in late 2024, two years after the exchange collapsed.
While creditors can expect 100% payouts, this refers to the fiat value of their holdings at the time FTX fell into bankruptcy. This was in November 2022 and the very depths of the bear market, however, meaning that recipients will still miss all the gains made in the market since then.
