BitGo advances FTX repayment amid rising phishing threats

BitGo has reportedly initiated the second phase of FTX’s repayment process, marking another milestone in the exchange’s long-awaited recovery effort.

On May 27, FTX creditor Sunil Kavuri reported that user accounts had been credited through BitGo as part of the repayment rollout. However, these funds will remain locked from trading until May 30.

He said:

“FTX Distribution to Bitgo has been credited to accounts. Can be viewed but not traded until 30th May.”

FTX Creditor Repayment (Source: X/Kavuri)

BitGo has yet to respond to CryptoSlate’s request for comment as of press time.

This development follows a recent update from the FTX Recovery Trust, which confirmed plans to disburse over $5 billion to approved creditors. The payments, facilitated by BitGo and Kraken, are expected to arrive within one to three business days starting May 30.

This latest round follows the first repayment wave in February, which returned approximately $1.2 billion to former FTX users.

Still, not all creditors are satisfied with the process. Many have criticized the bankruptcy plan for pegging repayment amounts to crypto prices from late 2022, just after the exchange’s collapse, rather than current valuations.

Since then, Bitcoin price has surged from below $20,000 to over $110,000, frustrating creditors who expected crypto-denominated refunds. Most repayments are being made in fiat, further aggravating concerns about the plan’s fairness.

Phishing risks rise

Meanwhile, phishing attempts targeting FTX creditors have surged in the lead-up to the second round of payouts.

Kavuri issued a warning on X, alerting creditors to fraudulent emails that mimic communications from BitGo, Kraken, and FTX. These emails direct recipients to fake websites that steal login credentials and claim information.

Considering this, Kavuri emphasized the need for caution. He advised users never to click on any link received via email, even if the source appears trustworthy.

Instead, he urged FTX creditors to manually type the official website addresses in a separate browser window to access their accounts.