Good news is on the way for FTX creditors as Kraken has initiated the distribution process and the creditors will be receiving their funds soon. According to Sunil Kavuri, a creditor activits (@sunil_trades), posted on his X (formerly known as twitter) account, regarding the mails that were sent in by Kraken to the eligible creditors. The mail invites creditors to receive distributed funds from the bankruptcy proceedings.
Kraken Leads the Recovery Initiative
Kraken has taken the first step by emailing the eligible creditors regarding the distribution of funds to the FTX creditors. This move must have sent a sense of relief to the creditors who were in the dark in terms of repayments and resolution for months now.
For creditors with claims under $50,000, the recovery phase has been streamlined. The claims are to be settled within 60 starting from January 3. This move is going to offer some reassurance to smaller investors who have been waiting for clarity since the exchange’s collapse.
A few things that the creditors have to keep in mind for the distribution process is that the user must have a Kraken account that is linked to their FTX account and is verified.
BitGo Set to Join the Process
BitGo, another key player in the recovery process, is expected to carry out the similar distribution process soon. Though no further details have been outlined but involvement of multiple platforms indicates the collaborative effort that is being made to fast forward the recovery process for the affected creditors.
Sunil, in another tweet, informed X users that the FTX creditors are receiving their claims in USD (fiat currency) instead of cryptocurrency. He notes that they can purchase stablecoins using the received fiat currency through BitGo or Kraken.
FTX Claims Distribution
Distributor: Kraken@krakenfx has started sending out emails informing FTX customers that have chosen Kraken that the onboarding process has been successful@BitGo is likely to do the same
No timeline set for >$50k
Claim< $50k within 60d 3rd Jan pic.twitter.com/W7cZUQ79lH
— Sunil (FTX Creditor Champion) (@sunil_trades) January 9, 2025
He also expressed concern about the tax implication of receiving fiat currency versus stablecoin, suggesting that the creditors may lose 30-40% of their claims due to taxes. This also implies that Sunil believes receiving stabelcoins directly would have been more tax-efficient for the creditors.
Even though this news has sparked a sense of optimism for the eligible creditor but there has been no timeline that has been provided for claims exceeding $50,000, leaving larger creditors in a state of limbo. The absence of any timeline for resolving claims above $50,000 continues to fuel frustration amongst those who suffered a huge financial losses because of the collpase.
A Long Road to Recovery
FTX’s bankruptcy has been one of the biggest collapses in the cryptocurrency industry that affected thousands of investors around the globe. While distribution of the funds is a step in the right direction, the complex nature of bankruptcy claims and the scale of FTX’s collapse have prolonged the recovery process and made it more uncertain for the creditors.
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