FTX Token (FTT) jumped 15% in 24 hours after it emerged that FTX will begin paying creditors and customers in early 2025 as part of its bankruptcy process. This is a significant step in the company’s Chapter 11 reorganization process.
The court-approved bankruptcy plan, confirmed on October 2024, will take effect on January 3, 2025. That date will also be the “record date” for the first tranche of payments to some creditors.
According to a statement, FTX said it will begin making payouts 60 days after the plan becomes effective, starting with the “Convenience Classes” claims.
The announcement caused a sharp price hike for FTX Token to $3.28 while pushing the market cap to $1.08 billion. The trading volume surged 170% and suggests investors are hopeful that a positive outcome will be realized in relation to those affected by the collapse of the exchange in 2022.
Though these payments represent a good step forward, the FTX Chapter 11 process has just begun. It remains to be seen when it will finally be over with this company, which continues to face very complex legal and financial challenges. Recovery for the company will likely take years, much of it depending on asset liquidation and the resolution of outstanding legal issues.
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