Compensation for FTX Creditors: The Hidden Challenges Ahead

The process of compensating creditors of the bankrupt FTX exchange has begun. Everyone is talking about creditors receiving 100% of their funds plus an additional 9% annual interest. However, one crucial detail seems to be overlooked.

Payments are being processed through two agents: Kraken and BitGo. This means that to receive compensation, creditors must have an account with either of these platforms, where the funds from FTX will be deposited within 60 days.

Not every FTX client can register with BitGo or Kraken. The list of jurisdictions where these platforms do not operate differs from FTX's list of restricted regions. If an FTX client resides in a jurisdiction where neither BitGo nor Kraken provides services, they have no technical means to receive their payment - even if they’ve completed all the necessary formalities.

For example, a Bitcointalk user shared their experience of completing every step required for compensation but failing at the last hurdle: their jurisdiction was unsupported. Based on the Russian language in their post, they may be from Russia, Belarus, or certain regions of Ukraine, which are outside Kraken’s and BitGo’s service areas.

In such cases, legal recourse offers no real help. The lesson here is simple: always self-custody your crypto assets. And when it comes to exchanges, stick with rabbit.io.