Rumors are circulating on social media that the FTX bankruptcy estate will begin distributing reimbursement funds to creditors and customers on Sept. 30. However, the rumors are false, as the reimbursement plan has not yet been approved by a court of law.
According to the updated Chapter 11 filing, the next court hearing to confirm the restructuring plan is Oct. 7. Judge John T. Dorsey of the United States Bankruptcy Court for the District of Delaware will oversee the hearing.
If the plan is approved, claimants with claims under $50,000 could start receiving payments by the end of 2024. Those with larger claims may not receive distributions until the first or second quarter of 2025.
Related: FTX creditors only getting ‘10-25% of their crypto back’ — Creditor
The distribution plan faces opposition from creditors
FTX creditors, led by Sunil Kavuri, have raised objections to the reorganization plan on multiple grounds. These include a request to be compensated with in-kind assets rather than cash and opposition to the taxable event that a cash payout would trigger.
Attorneys for FTX insist that any creditor reimbursements must be made in cash to avoid clashing with existing Chapter 11 bankruptcy laws and hindering the process. However, the question of cash or crypto has sparked intense opposition among creditors, who argue in-kind distributions are the only way to make creditors and former customers whole.
The current distribution plan stipulates that creditors will be reimbursed according to the date the legal petition was filed. At that time, the price of Bitcoin
Market impact of FTX distribution payments
Founder of 10x Research Markus Thielen believes that the FTX payout may be a bullish catalyst for the markets .
The analyst explained to Cointelegraph that the reimbursement might cause a $5 billion to $8 billion capital inflow into the market — creating demand and sending prices higher.
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