Crypto custodian BitGo has started crediting FTX customers in the second phase of repayments by the bankrupt company. FTX creditor champion Sunil Kavuri disclosed this on X, adding that claims below $50,000 get 120% of their value, with the 20% being interest.
According to Kavuri, the repayments have started reflecting in the accounts of those who chose BitGo as their distribution agent. However, the creditors cannot transfer or withdraw the funds until May 30.
He said:
“FTX Distribution to Bitgo has been credited to accounts. Includes FTX Bahamas process. Can be viewed but not traded until 30th May.”
The developments do not come as a surprise given that BitGo and Kraken, the two distribution agents that the FTX estate is using, sent emails to customers telling them they will get the repayments by May 30.
Several users have already confirmed receiving the funds, which for many marks an end to an almost three-year wait for a refund after the FTX exchange filed for bankruptcy in November 2022.
FTX repayments are far from over
With this latest repayment, FTX has paid out around $6.2 billion to creditors across two phases, effectively discharging most of its debt obligations. However, there are still several users waiting to receive their funds.
Comments under Kavuri posts included complaints and questions from several users. Most of them have been stuck in the Know Your Customer (KYC) stage, with their verification still pending after months.
Other users also asked for updates on the disputed claims and when they would get more information.
Although Kavuri said that the repayments include Bahamas creditors, several users using the FTX Bahamas claims process reported that they have been stuck in the verification stage even after doing all that is requested.
The FTX Support page also confirmed this, noting that those who chose the Bahamas process will not have access to Stage 9, which is the distribution page.
It said:
“If your claim was traded or you elected into the Bahamas process, you will not be able to access Step 9.”
Beyond FTX Bahamas creditors and disputed claims, there are still creditors in restricted jurisdictions such as Africa, Asia, the Middle East, and Eastern Europe. According to reports, the bankruptcy estate is already working on how to repay this group.
Thus, the bankrupt estate still has more repayments in the coming months, which it acknowledged in its last press release, noting that subsequent records and payment dates would be announced in due course. Overall repayments could reach as high as $16 billion, according to estimates.
Ellison could get out of jail before the FTX bankruptcy process ends
Meanwhile, the delays in repayments represent one of the multiple things creditors continue to complain about. While the administrators noted that the magnitude of FTX’s failure and its complexity are key reasons for delays, several creditors believe it is the fault of the bankruptcy professionals.
Critics point to several issues, including the various clawback lawsuits that FTX bankruptcy lawyers have instituted that continue to drag the process. The estate is locked in a legal battle with Binance over $2 billion paid to the exchange for share buyback.
FTX also recently instituted legal actions against non-fungible token (NFT) marketplace NFT Star and artificial intelligence platform Delysium last month, claiming they did not deliver tokens the exchange bought from the platforms, adding to the pending lawsuits it is involved in.
The long wait for repayment is even more pronounced given that criminal actions against all FTX executives have already been concluded while some creditors are still waiting for repayments.
Interestingly, at least one of these executives could complete her jail term before the FTX Bankruptcy process ends. Alameda Research CEO Caroline Ellison is set for release by May 2026 after getting a six-month reduction in her sentence for good behavior.
Other executives, such as former co-CEO Ryan Salame and co-founder Sam Bankman-Fried, have longer jail terms that reduce their chances of getting out anytime soon. Still, Bankman-Fried could see up to a 4-year reduction in his 25-year sentence for good behavior.
