Kraken, BitGo Lock In FTX Repayment Deadline: May 30 or Bust

Crypto’s biggest custodians just drew a line in the sand—FTX creditors get their crumbs by month’s end or the lawyers feast instead.

No extensions, no excuses. Just cold, hard blockchain timestamps.

Because nothing says ’trustless system’ like a court-mandated repayment schedule.

Users still await funds as criticisms trail FTX bankruptcy process

The latest distribution means that FTX bankruptcy estate has now paid over $12 billion to creditors, and FTX EU users have also started getting repayments from Backpack Exchange. However, there are still many users waiting to get their repayments.

Most of the unpaid users are in restricted countries such as China, Russia, and almost all African countries. So far, there has been no official communication from the FTX estate about when this group of creditors will get their payout.

However, there are reports that the exchange could soon add more distribution agents to support users in this restricted territory. FTX creditor Zhetengji on X confirmed this while adding that he is uncertain if the new distribution provider will cover FTX customers in mainland China.

Still, many users, including those who have gotten their payouts, criticize the bankruptcy process, which is paying them at the value of their assets in 2022 when some have more than quadrupled.

While most people blame the estate administrators, some believe the US government was also complicit. FTX creditor Arush believes the US government allowed insiders to profit from FTX’s bankruptcy by selling assets at a huge discount.

He noted that the government sold the HOOD stock that Sam Bankman-Fried bought for $648 million back to Robinhood for $615 million even before Bankman-Fried’s conviction. The same shares are now worth $3.4 billion.

Legal battles over FTX’s bankruptcy remain

Meanwhile, multiple legal dramas related to the FTX bankruptcy have continued in the background. Most of these cases revolve around clawback efforts by the FTX estate, one of the biggest being the $1.7 billion case against Binance.

However, Binance recently asked the court to dismiss the lawsuit, noting that it is baseless and FTX’s failure is due to corporate fraud. The exchange administrators had claimed in the original lawsuit that FTX’s payment to Binance in 2021 as part of its share repurchase agreement happened when it was already insolvent.

It also claimed that Binance ex-CEO Changpeng Zhao maliciously triggered the bank run on FTX with his post on Twitter (now X). Binance disagreed, noting that the tweet was after a Coindesk report on FTX, and the bankruptcy estate did not disprove the tweet as false.

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