These rumors sparked excitement about a potential market surge linked to a $16 billion distribution. However, FTX clarified that the timeline is different, with no payments expected before March 2025.
According to FTX’s official statements, the firm’s reorganization plan will take effect in January, with the first payments slated for 60 days later. Sunil Kavuri, an advocate for FTX creditors, also refuted the claims, stating that no January payouts or $16 billion disbursements are planned. FTX currently holds around $13 billion in cash reserves, projected to grow to $14 billion by March 2025, with additional funds from lawsuits and investments potentially adding $5–7 billion.
FTX’s bankruptcy proceedings culminated in October 2024 with a $16.5 billion reorganization plan to compensate impacted users. Initial payouts will prioritize creditors with claims under $50,000, who represent over 90% of claimants. Reimbursements will be based on crypto values from November 2022, when FTX filed for bankruptcy. At the time, Bitcoin and Ethereum traded at $20,000 and $1,200, respectively, much lower than their current values of around $100,000 and $3,000. As a result, payout values will be comparatively lower.
FTX has partnered with BitGo and Kraken to manage the distribution process, which will use stablecoins for payouts to individual and institutional creditors across supported regions. The exchange’s collapse in late 2022 was a major blow to the crypto industry. A liquidity crisis triggered by massive customer withdrawals exposed severe mismanagement of funds under former CEO Sam Bankman-Fried.
US prosecutors revealed that Bankman-Fried misused customer funds to cover losses at Alameda Research and made substantial political donations. This led to criminal convictions for Bankman-Fried and several associates, including Ryan Salame and Caroline Ellison, marking one of the most significant scandals in crypto history.