FTX Trading Ltd. and FTX Recovery Trust have announced that funds will be disbursed to creditors starting from February 18. According to the firms, the date is in line with what was specified in the company’s Chapter 11 Recovery Plan.
The first round of distributions will go to holders of the allowed claims in the plan’s convenience class, provided they meet the requirements. The firm has also announced that eligible creditors will be able to receive their payments one to three days after the beginning of the disbursement.
FTX begins creditor fund transfer
According to its announcement, it has transferred funds to BitGo and Kraken, the approved Distribution Service Providers. According to the plan, repayments will be made to both retail and institutional clients. FTX was high-flying since it was created before going bankrupt in 2022. The executives at the firm were alleged to have embezzled funds, with former CEO Bankman-Fried incarcerated in the process.
However, the former FTX CEO’s parents have been lobbying for a presidential pardon from Donald Trump, but it is still unsure if the former crypto billionaire will get one very soon. While he is still in prison, he has argued the length of his jail term, noting the recovery efforts by users on the platform. In the same vein, FTX executive Ryan Salame, who was sentenced to jail, is also seeking a pardon.
Creditors urged to contact support as Bitcoin withdrawals surge
FTX has urged users to contact the customer support of the designated distribution service providers if they have any issue. The platform also added that once the funds are transferred to them, they have total control over it. The announcement is a welcome development for the company’s creditors considering they have been waiting for two years since the exchange went down.
The company also saw a large Bitcoin withdrawal, with data showing that about 47,000 BTC were taken from the company’s reserves. While experts have played down the transfer as internal, it could also be as a result of whales trying to accumulate. The move is also not expected to affect the price of the asset, although it may kickstart an accumulation phase that could trigger adoptions.