Kraken and BitGo to Handle FTX Creditor Reimbursement Early 2025

Collapsed cryptocurrency exchange FTX has announced plans to start repaying creditors and customers in early 2025 as the company nears the conclusion of its Chapter 11 bankruptcy proceedings.

The update was shared on Monday, outlining a court-approved reorganization timeline.

FTX stated that its reorganization plan will take effect on January 3, 2025, after which initial repayments will begin within 60 days. FTX’s bankruptcy team, led by CEO John J. Ray III, is overseeing the process.

Repayments will be facilitated by cryptocurrency platforms Kraken and BitGo, which will handle distributions to eligible creditors. To receive payments, FTX customers must complete know-your-customer (KYC) verification, submit tax forms, and onboard with Kraken or BitGo before the effective date.

The first phase of repayments will focus on creditors with claims valued at $50,000 or less—a group that accounts for more than 90% of all creditors in the FTX bankruptcy case. Larger claims will be addressed in subsequent rounds, with specific timelines to be announced later.

Under the current plan, creditors will receive the U.S. dollar value of their crypto holdings based on asset prices at the time of FTX’s bankruptcy filing in November 2022. This means the payouts reflect valuations frozen at pre-collapse rates, not current market prices.

It is worth noting that FTX has allocated up to $16.5 billion for creditor repayments, according to its finalized bankruptcy plan. The plan, completed in October, anticipates that roughly 98% of creditors will recover about 118% of their claims in U.S. dollar terms.

The repayment announcement marks a big step in the resolution of one of the largest crypto exchange collapses in history. FTX, once valued at $32 billion, filed for bankruptcy in late 2022 following revelations of financial mismanagement under its former CEO, Sam Bankman-Fried.