Journalist
Posted:
- FTX has begun repayments for claims worth $50K or below through BitGo and Kraken.
- The next compensation phase for >$50K claims is scheduled for early summer 2025.
The defunct FTX crypto exchange has begun repayment for users with claims worth $50K or less.
Reportedly, about $1.2B will be distributed in the first phase for this category of claims, also known as the ‘convenience class’ through Kraken and BitGo.
At the time of writing, Kraken’s co-CEO, Arjun Sethi, acknowledged that the exchange had processed funds to 46K creditors.
“I am pleased to announce a milestone: KrakenFX has completed the first distribution of funds from the FTX estate to over 46,000 creditors.”
Similarly, BitGo confirmed it was processing the funds and could be reflected within the next 72 hours. Most of the first phase of claims are entitled to about 118% in accrued interest.
Note, however, that the repayments will be in USD and not ‘in kind’ or crypto assets held by victims when FTX filed for bankruptcy.
Additionally, the compensation will be based on the value of the assets in November 2022. During the 2022 crypto winter, Solana [SOL] was about $8, BTC was valued at about $16K, and ETH traded at around $1200.
Larger claims set for May
The second phase, expected to be done in stages, will cover claims worth over $50K. According to the latest statement from the liquidators, the second repayment phase could begin on May 30th.
Commenting on the process, John J. Ray III, FTX Recovery Trust administrator, stated,
“We are pleased to commence initial distributions today and set the timeline for our next distribution… Our work is not over – we intend to continue our recovery efforts and returning funds to additional claim classes”
About $16B -$17B is expected to be distributed to FTX creditors by the end of the exercise.
This would mark three years since FTX went bankrupt after the founder, Sam Bankman Fried, misappropriated user funds.
In a similar gesture of compensation, Binance founder CZ, pledged to make donations to users who lost money in TST and Broccoli memecoins. However, he clarified that it’s not an endorsement of the tokens.
“Will donated it away, most likely to people who had a loss on TST or some of the Broccolis. This is NOT an endorsement for any of the tokens.”
That said, the FTT token, the native token of the defunct FTX exchange, was valued at $2. It was down 5% on the day amid broader bearish pressure in the market.
