Defunct cryptocurrency exchange FTX has resumed its customer recuperation process, targeting the convenience class in the initial distribution.
The FTX bankruptcy estate kicked off its reorganization plan on January 3. From Friday, the team will fully resume the processes involved in repaying affected investors in the exchange’s bankruptcy filing in November 2022.
The resumption marks a crucial stage in the process, which has undergone several legal proceedings. The initial phase will target holders of allowed claims in the convenience distribution.
Repayment Process in Full Swing
With the reorganization in full effect, the estate called on the convenience class of the allowed claims to complete the pre-distribution process. For context, the convenient class is a group of FTX’s allowed claims creditors with less than $50,000 worth of claims in the bankruptcy proceeding.
Notably, this stage mandates that distribution claimants meet KYC requirements, submit a tax form, and choose a distribution service provider. Meanwhile, the convenience creditors have until January 20 to meet this pre-distribution criteria or miss out on the initial repayment process.
Any claimant in this category who fails to satisfy the requirements will receive reimbursement in the subsequent distribution process. Moreover, repayment for this class will run for 60 days from the start date, and creditors are expected to receive a total of $1.2 billion.
Convenience Creditors to Receive 119% Repayment
According to the court ruling, the FTX bankruptcy estate will fully repay creditors in the convenience class and add extra incentives. Claimants in this category will receive 119% of their asset’s value on the day the defunct exchange filed for bankruptcy.
Notably, Kraken and BitGo are the only distribution service providers available. The exchanges will allow users to withdraw in US dollars or convert claims to cryptocurrencies.
In the meantime, details for other creditor classes remain officially unavailable. However, some expect the process to resume immediately after distribution to the convenient creditor class.
FTX announced in December that it had raised over $14 billion and intends to fully recompense users.
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