Kraken Begins FTX Payouts as Creditors Await Resolution

Kraken has started distributing funds to creditors of the failed cryptocurrency exchange FTX, marking a crucial step in addressing the fallout from its 2022 collapse.

Creditors using Kraken have received confirmation emails indicating the onboarding process is complete, paving the way for payments. BitGo, another appointed distributor, is set to begin its process soon, though no exact date has been announced.

Smaller creditors, with claims under $50,000, can expect payouts within 60 days starting January 3, 2025, ensuring funds are distributed by March 3, 2025. However, no timeline has been provided for larger claims exceeding $50,000.

Kraken is also offering incentives to affected users, including fee-free trading on amounts up to $50,000 and additional credits tied to the payout size, which will become available once distributions are complete.

FTX’s 2022 bankruptcy, triggered by allegations of fraud and misuse of customer funds involving Alameda Research, left creditors and users facing massive losses.

Once valued at $32 billion, the exchange’s downfall culminated in a 25-year prison sentence for its founder, Sam Bankman-Fried. Kraken and BitGo were tasked with managing the recovery and distribution of funds, providing a glimmer of resolution to those impacted by the collapse.