FTX announced on January 4th that there are strict deadlines and requirements for the initial allocation of Convenience Classes according to the plan. Only creditors who complete these requirements before the specified deadline will be eligible for allocation. Failure to complete them within the specified period may result in payment delays or even loss of allocation rights.
Initial Distribution Deadline: January 3, 2025 (KYC approval required)
To qualify for the initial allocation, creditors must meet all pre-allocation requirements before January 3, 2025. This date is designated as the Initial Distribution Record Date. In particular, creditors must fulfill all the conditions listed in Section 2.1.8 of the confirmed plan. One important requirement is that creditors must complete the “Know Your Customer” (KYC) verification before this date. Creditors who fail to complete this step will not be able to participate in the initial allocation.
Additional Requirements and Extended Deadlines: January 20, 2025 (for tax form submission and distribution service provider selection)
Creditors who have been confirmed to be included in the Convenience Class by January 3, 2025 can complete the remaining pre-allocation steps within the additional deadline. The extended deadline is January 20, 2025, and creditors must fulfill the following requirements before this date:
Submit complete tax forms (Step 7).
Choose and successfully complete the onboarding process with a distribution service provider (Step 8).
Pass sanctions screening to ensure compliance with legal and regulatory requirements.
Creditors who fail to complete these steps before January 20, 2025 will be deferred to subsequent distribution rounds.
Consequences for FTX users who fail to meet the deadlines: Delayed compensation or loss of eligibility
According to the terms of the plan, creditors who fail to meet these deadlines will face the following consequences:
Payment delays:
Late submissions will not be processed in the initial allocation but will be deferred to subsequent distribution rounds, which may result in a delay of several months.
Possible loss of allocation rights:
Section 7.8 of the plan stipulates that creditors who fail to complete the pre-allocation requirements within six months after the Initial Record Date (before July 3, 2025) may lose their allocation rights.
Section 7.14 emphasizes that creditors must respond to requests and complete all pending tasks in a timely manner. Failure to do so within the specified time will also result in the loss of allocation rights.
What happens if the requirements are delayed?
Creditors who fail to complete the requirements within the initial distribution deadline but subsequently complete the relevant steps will have their allocation processed in the following months. However, creditors are strongly advised to adhere to the initial deadline to avoid unnecessary delays or complications.
Final reminder to creditors
Creditors of the Convenience Class plan should be aware of the urgency of time. To receive the allocation payment on time, please make sure to complete all pre-allocation requirements before the following key dates:
January 3, 2025: Initial Distribution Record Date
January 20, 2025: Final deadline for tax form submission, provider onboarding, and sanctions screening
Late completion of creditor requirements may result in payment delays or even complete loss of allocation rights. Do not risk losing your rights, take immediate action to ensure all necessary steps are completed!
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