• Kraken has started notifying customers about the distribution of FTX claims.
• BitGo is expected to commence a similar process soon.
• Claims below $50,000 will be processed by March 3, 2025.

Kraken has officially commenced the distribution process for claims related to the collapsed cryptocurrency exchange, FTX, according to Sunil FTX creditor activist 

Creditors who chose Kraken to handle their claims are getting emails confirming that the onboarding process is complete. This is a key step in paying back creditors after FTX’s very public bankruptcy in 2022.

BitGo, another designated distributor, will do the same in the coming weeks. But there’s no set date for when that will happen.

Claim Processing Timeline

The claims distribution process works differently depending on the size of the claim. For FTX creditors with claims over $50,000, there’s no timeline for when they’ll get their funds.

On the other hand, creditors with claims below $50,000 have been given a clear timeframe. Specifically, the distribution is expected to be completed within 60 days, starting January 3, 2025. This means smaller creditors should receive their funds by March 3, 2025.

Read also: Backpack Acquires FTX EU, Crypto Derivatives Launch by Q1 2025

In addition to processing claims, Kraken is offering incentives to support FTX victims. New users who choose Kraken to handle their payouts will get trading fee credits.

These include fee-free trading up to $50,000 on Kraken Pro, plus up to $105 in trading fee credits based on the payout amount. These credits will show up in user accounts after the FTX distribution process is done.

FTX Bankruptcy Saga and Implications 

FTX’s bankruptcy proceedings, which began in 2022, have been closely monitored due to the exchange’s prominence in the cryptocurrency market and the significant financial losses its global user base incurred. 

The start of the claims distribution is a good sign, but delays for larger claims might upset some creditors.

Read also: FTX Slams Backpack’s Misleading FTX EU Fund Distribution Claims

Here’s a quick recap. In November 2022, FTX declared bankruptcy after accusations of financial misconduct and fraud connected to the exchange and Alameda Research.

Sam Bankman-Fried, the founder and ex-CEO, was sentenced to 25 years for fraud and misusing customer funds. FTX, once valued at $32 billion, chose Kraken and BitGo to manage the recovery and distribution of creditor funds.