No, FTX distribution fees will not start on September 30th.
There are rumors on social media that the FTX bankruptcy estate will begin distributing cash to creditors and clients on September 30, 2024. However, the rumor is false as the payout plan has not been approved by the court.
According to the updated Chapter 11 filing, the next court hearing to confirm the restructuring plan is October 7, 2024. Judge John T. Dorsey of the United States Bankruptcy Court for the District of Delaware will preside over the hearing.
If the plan is approved, smaller claimants with claims of less than $50,000 could begin receiving distributions as early as 2024. Claimants with large claims may not see distributions until the first or second quarter of 2025.
FTX reorganization plan documents. Source: Krol
Related: FTX lenders only get '10-25% crypto back' – Lender
The distribution plan faced objections from creditors.
Creditors of Sunil Kavuri-led FTX have opposed the reorganization plan on various grounds, including their demand for in-kind repayment of assets and the taxable event the cash payment would create.
FTX's attorneys insist that any creditor payments must be made in cash to avoid running afoul of existing Chapter 11 bankruptcy laws and disrupting the process. However, the question of money or crypto has raised a lot of opposition among creditors, who argue that distributions in kind are the only way to fully satisfy creditors and former customers.
The current distribution plan stipulates that creditors are paid based on the date the legal petition is filed. At that time, the price of Bitcoin (BTC) was approximately $16,000. This means lenders and their former clients will receive only about a quarter of their previous holdings under the current distribution plan, FTX lender Sunil Kavuri told Cointelegraph.
Market impact of FTX distribution fees
Marcus Thielen, founder of 10x Research, believes the FTX payout could be a big push for the markets.
As the analyst explained to Cointelegraph, the fee could inject $5 billion to $8 billion of capital into the market — creating demand and sending prices soaring.
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