In a major development for former FTX customers, cryptocurrency exchange Kraken has initiated the distribution of funds to creditors affected by FTX's 2022 collapse. The move represents the first concrete step toward compensating users who lost access to their assets when the crypto giant imploded.
Kraken has begun notifying eligible creditors via email that their onboarding process is complete and payments can commence. The company is also offering incentives to affected users, including zero-fee trading for amounts up to $50,000 and additional credits based on payout size.
For claims under $50,000, creditors can expect to receive their funds between January 3 and March 3, 2025. However, the timeline remains unclear for larger claims exceeding $50,000. BitGo, another appointed distributor, is expected to begin its payout process soon, though no specific date has been announced.
The distributions come in the wake of FTX's catastrophic bankruptcy in 2022, which sent shockwaves through the cryptocurrency industry. The exchange, once valued at $32 billion, collapsed amid allegations of fraud and misuse of customer funds involving Alameda Research. The scandal led to a 25-year prison sentence for FTX founder Sam Bankman-Fried.
The appointment of established crypto firms Kraken and BitGo to manage fund recovery and distribution has provided a pathway to resolution for creditors who faced substantial losses in the exchange's downfall. As the process unfolds, affected users will finally begin to see some recovery of their frozen assets after more than a year of uncertainty.