FTX Creditors Set to Receive Distributions in 2025 Through Kraken and BitGo

Users affected by the 2022 exchange disaster will shortly start to receive payments as part of FTX’s ongoing bankruptcy proceedings. The distribution process will start on January 3, 2025, after U.S. District Judge John Dorsey gave his authority in October.

Kraken and BitGo will be the official partners for disbursing these bankruptcy payments, according to FTX. A representative for FTX’s biggest creditor group, Sunil Kavuri, stated that these platforms were selected because of their dependable payment methods. As a possible hedge against the volatility of conventional cryptocurrencies, creditors will be able to choose to receive their payouts in stablecoins.

While the plan’s approval has drawn some controversy, it has garnered overwhelming support from creditors. In October, the plan was passed with 94% of creditors voting in favor. This vote includes claims totaling nearly $7 billion, highlighting the broad consensus for this repayment approach. Though some creditors, including Kavuri, have expressed dissatisfaction over the decision to pay in cash, the move reflects a practical solution to distribute funds efficiently.

Successful Asset Recovery

FTX has made significant progress in recovering assets since its collapse. Under the leadership of John J. Ray III, who replaced Sam Bankman-Fried as CEO in late 2022, the company has successfully recovered approximately $16 billion in assets. Ray has been commended for his team’s thorough efforts in returning funds to creditors.

Ray, reflecting on the recovery process, remarked, “For the past two years, our team of professionals have meticulously and efficiently worked to recover billions of dollars to reach this point. The Plan becoming effective in January 2025 and the start of distributions are reflections of the outstanding success of the recovery efforts.”

The bankruptcy plan, which was approved by Judge Dorsey in Delaware, stipulates that 98% of creditors will receive 118% of their claim value. This plan marks a critical milestone in the ongoing restructuring of FTX, a company once considered a major player in the crypto exchange market. The fallout from FTX’s collapse also included the fall of Alameda Research and criminal charges against Bankman-Fried, who was sentenced to 25 years in prison after being found guilty on seven charges in November 2023.

This ongoing recovery effort represents a significant chapter in the fallout from the exchange’s collapse, and creditors are now one step closer to receiving much-needed restitution.