Kraken and Bitgo confirm May 30 FTX repayments plan

Kraken and Bitgo, the distribution agents selected by bankrupt exchange FTX, have confirmed that the second repayment for creditors will start soon. The two crypto firms sent emails to their customers telling them to expect a payout by May 30.

FTX creditor Sunil Kavuri shared the update on X, with screenshots of the email sent by the firms. The two emails, which are quite similar, stated that FTX has completed the distribution of the funds to them, and they will proceed to credit the customers’ accounts.

However, Kraken stated that the funds would appear in customers’ accounts on or before May 30, while Bitgo specified May 30.

The firm said in its email:

“We are writing to confirm that FTX has completed your distribution to us as your selected distribution service provider. Please note that such funds are currently expected to be credited to your BitGo account on May 30, 2025.”

The emails to the customers confirm an earlier notice from the FTX Recovery Trust stating that it would send over $5 billion to creditors for the second phase of its distributions. The group that will benefit from this payout is the five convenience classes.

These creditors are getting between 54% and 120% of their assets with claims greater than  $50,000, international creditors get 72%, and US claims greater than $50,000 will get 54%. Claims equal to or less than $50,000 will get 120%. With the second distribution set to be completed by May 30, the firm plans to announce the next set of creditors’ distributions in due course.

Users still await funds as criticisms trail FTX bankruptcy process

The latest distribution means that FTX bankruptcy estate has now paid over $12 billion to creditors, and FTX EU users have also started getting repayments from Backpack Exchange. However, there are still many users waiting to get their repayments.

Most of the unpaid users are in restricted countries such as China, Russia, and almost all African countries. So far, there has been no official communication from the FTX estate about when this group of creditors will get their payout.

However, there are reports that the exchange could soon add more distribution agents to support users in this restricted territory. FTX creditor Zhetengji on X confirmed this while adding that he is uncertain if the new distribution provider will cover FTX customers in mainland China.

Still, many users, including those who have gotten their payouts, criticize the bankruptcy process, which is paying them at the value of their assets in 2022 when some have more than quadrupled.

While most people blame the estate administrators, some believe the US government was also complicit. FTX creditor Arush believes the US government allowed insiders to profit from FTX’s bankruptcy by selling assets at a huge discount.

He noted that the government sold the HOOD stock that Sam Bankman-Fried bought for $648 million back to Robinhood for $615 million even before Bankman-Fried’s conviction. The same shares are now worth $3.4 billion.

Legal battles over FTX’s bankruptcy remain

Meanwhile, multiple legal dramas related to the FTX bankruptcy have continued in the background. Most of these cases revolve around clawback efforts by the FTX estate, one of the biggest being the $1.7 billion case against Binance.

However, Binance recently asked the court to dismiss the lawsuit, noting that it is baseless and FTX’s failure is due to corporate fraud. The exchange administrators had claimed in the original lawsuit that FTX’s payment to Binance in 2021 as part of its share repurchase agreement happened when it was already insolvent.

It also claimed that Binance ex-CEO Changpeng Zhao maliciously triggered the bank run on FTX with his post on Twitter (now X). Binance disagreed, noting that the tweet was after a Coindesk report on FTX, and the bankruptcy estate did not disprove the tweet as false.

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