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Kraken is now notifying its customers about the distribution and use of FTX claims.
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BitGo will likely begin a similar process in the near future.
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Claims under $50,000 will be processed before March 3, 2025.
Sunil FTX Creditor activist has confirmed that Kraken has begun the distribution process of claims related to the collapsed cryptocurrency, FTX.
Emails confirm that the onboarding is complete for creditors who selected Kraken to manage their claims. This is a crucial step in repaying creditors after FTX’s public bankruptcy in 2022.
BitGo, a second designated distributor, is also expected to do the same within the next few weeks. There is no date set for this.
Claim Processing Timeline
The process of distributing claims is different depending on their size. There is no timetable for FTX creditor’s who have claims above $50,000.
A clear timeline has been set for creditors with claims under $50,000. The distribution is expected to take place within 60 days starting on January 3, 2025. This means that smaller creditors will receive their funds no later than March 3, 2025.
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Kraken offers incentives to help FTX victims in addition to processing claims. Kraken will give trading fee credits to new users who choose Kraken for their payouts.
The trading fees are based on payout amounts and can range from $105 to $55,000. These credits will appear in the user’s account after the FTX Distribution process is complete.
FTX Bankruptcy Saga: Implications
The bankruptcy proceedings of FTX, which began in 2020, have been closely watched due to its prominence in the cryptocurrency markets and the significant financial loss its global users incurred.
The beginning of the claims distribution process is a positive sign, although delays for larger claims could upset some creditors.
Read Also: FTX Slams Backpack for Misleading FTX EU fund Distribution Claims
Here’s a quick recap. In November 2022 FTX declared bankruptcy following accusations of financial misconduct, fraud and Alameda Research.
Sam Bankman-Fried was sentenced to a 25-year prison term for fraud and misusing of customer funds. FTX was once valued at over $32 billion and chose Kraken and BitGo as the managers of recovery and distribution.
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