FTX to Start Paying Victims via Kraken and BitGo on January 3
Date: 2024-12-17 Author: Henry Casey Categories: BUSINESS
Users affected by the FTX collapse in 2022 will begin receiving bankruptcy payments as early as January 3, 2025. The funds will be distributed through the Kraken and BitGo platforms, and payments will be available in stablecoins.
The decision was made possible after the plan was approved by a US court in October 2024. Judge John Dorsey of the Delaware District Court gave the green light to the proposed reorganization plan, which was supported by 98% of creditors.
According to a statement from Sunil Kavuri, a representative of FTX's largest group of creditors, Kraken and BitGo were chosen to distribute payments due to their robust payment processing capabilities. Kavuri also noted that choosing stablecoins for refunds will be a convenient option for users.
However, not all creditors were happy with FTX's decision to pay out in cash, as reported by Kavouri and other claimants. However, court documents show that 94% of creditors, whose total claims amount to about $7 billion, supported the plan.
FTX bankruptcy trustee John J. Ray III praised his team's work in returning about $16 billion in assets and cash to creditors. Ray took over the company in late 2022, replacing Sam Bankman-Fried.
Recall that along with FTX, other companies in its structure also went bankrupt, including Alameda Research. Many of Bankman-Fried's key associates made deals with federal prosecutors to reduce their sentences.
In November 2023, Bankman-Fried himself was found guilty on seven counts, including fraud, and sentenced to 25 years in prison. Under Ray's leadership, the FTX team is actively engaged in asset recovery and liquidation of the consequences of the collapse to compensate for the losses of creditors and customers.
As a result, from the beginning of 2025, former FTX users will finally be able to receive their funds through reliable partner platforms, which will be an important step in ending one of the largest bankruptcies in the history of the crypto industry.
