FTX Refunds Investors via Kraken and Bitgo

More than two years after declaring bankruptcy in November 2022, cryptocurrency exchange FTX has officially launched a plan to repay its creditors. The process began on January 3, 2025, with the cooperation of two strategic partners, Kraken and BitGo.

Repayment Plan Details

According to an announcement from FTX, the Chapter 11 reorganization plan has been approved by the court and will take effect on January 3, 2025. The first distributions are expected to take place within 60 days of the plan becoming effective, focusing on creditors in the “Convenience Classes”—those with claims under $50,000. This group accounts for more than 90% of all creditors, with total repayments estimated at approximately $1.2 billion.

To receive the refund, creditors will need to complete the necessary procedures, including identity verification (KYC), filing tax forms, and registering an account on Kraken or BitGo. FTX stressed the importance of completing these steps to ensure a smooth and timely distribution.

Impact on the Cryptocurrency Market

FTX’s return of assets to creditors is expected to have some impact on the cryptocurrency market. Some experts believe that the cash flow released from the refunds could be reinvested in the market, improving liquidity and positively affecting the prices of digital currencies. However, there are also concerns that the refunds could create selling pressure, especially if creditors decide to liquidate the assets they received, leading to price fluctuations in the market.

Note to creditors

FTX has warned of phishing emails impersonating the company in an attempt to steal users’ information. Creditors are advised to only file claims through the official FTX website and complete the necessary procedures before January 20, 2025 to ensure timely reimbursement.

The implementation of this reimbursement plan marks an important step forward in FTX’s post-insolvency recovery process, and demonstrates the company’s commitment to protecting investors’ interests and restoring confidence in the cryptocurrency market.