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- Kraken to distribute FTX repayments starting May 30 for small and large claims.
- Larger creditors delayed by legal issues; $16B allocated for repayments with 9% interest.
- FTX collapsed in 2022; Kraken aids transparent repayments to rebuild trust.
FTX has begun informing Kraken users about the next possible repayments. According to FTX creditor representative Sunil’s recent post on X, the distribution will commence on the 30th of May. This round will include cases equal to or below $50,000 and cases above $50,000. Thus, it points to the second stage in FTX’s repayment strategy.
FTX’s $16B Recovery Plan
The debt repayment process started earlier this year has benefited smaller creditor organizations. It began on February 18 with claims of not more than $50,000. These creditors were promised that they would be fully paid together with an interest of 9% per annum, and the payment was expected to be completed on April 11. Kraken assisted in the distributions with the help of BitGo and granted trading fee credits to make the process democratic among the holders.
Nonetheless, creditors such as institutional investors and venture capital firms have been affected by legal hurdles and challenges in recovering their assets. The distribution on May 30 addresses larger claims to be paid the same interest of 9% per annum. This is because roughly $16 billion has been set aside for total repayments, which is one key to enhancing recovery.
FTX mysteriously crashed in November 2022. The exchange was once estimated to be worth over $32 billion. However, it fell into ruins when it emerged that Alameda Research had embezzled customers’ funds. Withdrawal requests came in floods, and FTX could not handle the pressure. The exchange stopped the possibility of customers withdrawing money and declaring bankruptcy.
Sam Bankman-Fried was found guilty of fraud and conspiracy in November 2023. Other executives, including Caroline Ellison and Gary Wang, pleaded guilty and cooperated with authorities. New CEO John J. Ray III, succeeding in the role in November 2022, has been actively involved in recovering the lost assets through legal cases, purchases of real estate, and sales of other assets.
Kraken’s participation has mostly enhanced the repayment process. The exchange has made the process transparent and effective, ensuring the right leading trust is placed on the industry. FTX’s creditors hope for new information as the May 30 deadline approaches. Consequently, creditors receive new information now that this is the new era after FTX’s collapse.
