FTX Recovery Trust Aims to Aid Creditors with $5 Billion Distribution
FTX Recovery Trust Announces Major Distribution to Creditors
FTX Trading Ltd. and the FTX Recovery Trust, commonly referred to as FTX, have announced a significant step in their recovery efforts. As part of their Chapter 11 Plan of Reorganization, they are set to distribute over $5 billion to no less than a thousand creditors. This distribution is expected to commence on May 30, and all eligible claimants have been encouraged to diligently complete their pre-distribution requirements.
Details of the Distribution Process
In regard to the upcoming distribution, creditors who are part of the Convenience and Non-Convenience Classes that have met all necessary prerequisites can expect payments from their chosen Distribution Service Providers, namely Bitgo or Kraken. Typically, creditors will receive these funds within 1 to 3 business days from the distribution date.
Distribution Allocation Breakdown
The distribution will follow the established waterfall priorities as defined in the Plan:
- Class 5A Dotcom Customer Entitlement Claims will receive a 72% distribution.
- Class 5B U.S. Customer Entitlement Claims will receive a 54% distribution.
- Class 6A General Unsecured Claims and Class 6B Digital Asset Loan Claims will both receive a 61% distribution.
- Class 7 Convenience Claims will receive an exceptional 120% distribution.
Statement from the Plan Administrator
John J. Ray III, who serves as the Plan Administrator of the FTX Recovery Trust, expressed his optimism about the ongoing recovery efforts. He noted that reaching this stage of distributions not only represents a meaningful milestone but also illustrates the immense scale of the distribution process, which is unprecedented in size and complexity. Ray reassured creditors of the Trust's unwavering commitment to maximize recovery through effective claims management.
Understanding Your Options
For creditors considering the onboarding process with their chosen Distribution Service Provider, it’s crucial to note that by doing so, they relinquish their rights to cash distributions directly from FTX. Instead, they authorize FTX to channel these funds directly to the selected provider. Therefore, any queries regarding fund availability should be directed to customer support of the chosen Distribution Service Provider.
Eligibility Requirements for Future Distributions
To ensure they receive distributions in subsequent rounds, creditors need to complete several steps prior to the designated record date. These include:
- Accessing the FTX Customer Portal to verify their status as customers.
- Completing mandatory Know Your Customer (KYC) verification.
- Filing the requisite tax forms.
- Successfully onboarding with either BitGo or Kraken, as instructed on the FTX Customer Portal.
Transferee Claims and Distributions
For those holding transferred claims, distributions are designated only for the holder of the accepted claim, as recorded in the official claims ledger maintained by the Notice and Claims Agent. Therefore, stakeholders need to be vigilant regarding future record dates to ensure their claims are adequately processed and reflected.
Phishing Warnings for Creditors
Creditors should remain vigilant against potential phishing attempts masquerading as official communications from FTX. Genuine messages will not ask individuals for sensitive information such as wallet connections. Always double-check the integrity of the channels you interact with.
More Information and Resources
The U.S. Bankruptcy Court documentation, including the Plan and additional materials pertinent to the court proceedings, remains accessible through the official channels. FTX Digital Markets Ltd. is also reaching out to customers concerned with claims facilitated by them, providing additional details as needed.
Frequently Asked Questions
What is the total amount to be distributed by the FTX Recovery Trust?
FTX Recovery Trust is distributing over $5 billion to creditors.
Who qualifies to receive distributions from FTX?
Eligible claimants include holders from both Convenience and Non-Convenience Classes who meet all pre-distribution requirements.
When can creditors expect to receive their funds?
Funds will typically be disbursed within 1 to 3 business days following the distribution date.
How do customers onboard with Distribution Service Providers?
They need to log into the FTX Customer Portal, complete KYC verification, and follow onboarding only with BitGo or Kraken as instructed.
What precautions should creditors take against phishing?
Creditors should verify communication sources and understand that FTX will not ask for wallet connections or sensitive account information.
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