Backpack, a cryptocurrency exchange established by former FTX leaders, has begun the process for FTX’s European customers to reclaim their funds as part of the broader initiative to distribute recovery funds from FTX’s bankruptcy.
On April 1, Backpack announced a two-phase approach for customers to retrieve their euro balances. The first phase, which involves identity verification, is currently active, while the second phase, related to fund withdrawals, will be revealed soon.
In October 2024, a U.S. bankruptcy judge approved FTX’s Chapter 11 reorganization plan, enabling the distribution of funds to creditors. This decision marked the beginning of the repayment efforts, with Kraken and BitGo tasked with managing global distributions.
Kraken and BitGo were chosen as the official partners to manage the technical aspects of repaying creditors during the bankruptcy proceedings. On the other hand, Backpack’s involvement in the repayment process for FTX’s European clients stems from its acquisition of the former European segment of the FTX exchange, a deal sanctioned by the FTX bankruptcy court and the Cyprus Securities and Exchange Commission in December. This acquisition allowed Backpack to restore FTX EU’s licenses and provide a comprehensive range of crypto derivatives trading services to customers in the EU.
FTX, which entered bankruptcy in November 2022, began its $13 billion repayment initiative on February 18, initially focusing on “convenience class” creditors—those with claims up to $50,000. Repayments are being handled by BitGo and Kraken, with these creditors expected to receive full payment for their approved claims along with an annual interest rate of 9% retroactive to November 2022 by April 11.
Earlier this month, a representative for FTX creditors, Sunil, confirmed that the second phase of payouts, addressing claims above $50,000, is scheduled for distribution on May 30.