FTX Begins Repayments for Small Claims

FTX has started repayments for claims worth $50K or below through BitGo and Kraken.

The next compensation phase for claims over $50K is scheduled for early summer 2025.

The defunct FTX crypto exchange has initiated repayments for users with claims valued at $50K or less. Approximately $1.2B will be distributed in this first phase, known as the ‘convenience class,’ via Kraken and BitGo.

At the time of writing, Kraken’s co-CEO, Arjun Sethi, acknowledged that the exchange has processed funds for 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 is processing the funds, which could be reflected within the next 72 hours. Most of the first phase claimants are entitled to about 118% in accrued interest.

Please note that repayments will be made in USD, not in ‘in kind’ or crypto assets held by victims at FTX’s bankruptcy filing. Compensation will be based on asset values in November 2022. During the 2022 crypto winter, Solana (SOL) was around $8, Bitcoin (BTC) approximately $16K, and Ethereum (ETH) roughly $1200.

Larger Claims Set for May

The second phase, which is expected to unfold in stages, will address claims worth over $50K. According to the latest statement from the liquidators, this second repayment phase may commence 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 to $17B is anticipated to be distributed to FTX creditors by the end of the repayment process.

This marks three years since FTX went bankrupt following the misappropriation of user funds by founder Sam Bankman-Fried.

In a similar effort of compensation, Binance founder CZ pledged donations to users who lost money in TST and Broccoli memecoins. However, he clarified that it’s not an endorsement of either token.

> “Will donate 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 and experienced a 5% decline on the day amid broader market bearishness.