FTX Creditor Repayments to Begin, Exchanges Prepare Claims Distribution

• In the first wave of FTX repayments, “Convenience class” creditors will receive 119% of their asset value.
• FTX creditors are unhappy with the settlement due to potential missed gains over the past 2 years.
• Kraken and BitGo have been chosen as FTX creditor distribution partners.

More than two years after the FTX cryptocurrency exchange filed for bankruptcy, users expect to finally receive their repayments as “Joint Official Liquidators” (JOLs) Kraken and BitGo open up claims portals.

Over the next 60 days, FTX will distribute $1.2 billion to this first group of users who will receive 119% of their asset value from the bankruptcy filing date (Nov. 2022).

First Group

The FTX reorganization plan is entering a critical phase as the estate works to distribute repayments  to creditors.

The first wave, the “convenience class,” will need to complete KYC and other requirements before Jan. 20, 2025. Eligible users can still make their claims in future waves.

Customer emails from Kraken confirmed  the platform’s onboarding process has been successful. The exchange is now awaiting payments from the FTX estate.

In a small offering, Kraken also said  that it will offer FTX victims a $50,000 trading fee waiver on Kraken Pro to users who choose the exchange as their chosen FTX payments distributor.

Meanwhile, the customers of exchanges European Union (EU) arm, FTX EU, remain in limbo, as amounts owed to EU clients are yet to be determined .

End of an Era

The collapse of FTX and the subsequent sentencing of Sam Bankman-Fried (SBF) was a watershed moment in crypto, lasting over two years.

The exchange’s collapse followed allegations that FTX had been illegally misusing and mismanaging customer funds behind the scenes. Confidence was rocked, and customers sought to withdraw from the exchange, which missed over $8 billion in user funds.

The bankruptcy was filed on Nov. 22. Since then, there has been legal back-and-forth to finalize the creditor repayments deal. After many iterations, it would appear that the FTX debacle can finally be put to rest upon completion of the repayments.