Nearly 400,000 creditors from the bankrupt cryptocurrency Exchange FTX have missed out on repayments of $2.5 billion after failing to mandate the customer (KYC) verification process.
Approximately 392,000 FTX creditors have failed to complete the first step of knowing customer verification, according to an April 2 court filed in the U.S. Bankruptcy Court in the District of Delaware.
FTX users were originally required to begin the verification process to collect bills until March 3rd.
“If the owner of the claim listed in Schedule 1 attached thereto does not begin the KYC filing process on March 3, 2025 or 4pm ET (“Initial of the deadline”) or with regard to such a claim, such claim will be permitted and in its entirety will be removed and removed. ”
Filing by the FTX Court. Source:bloomberglaw.com
The KYC deadline has been extended until June 1, 2025, offering users another opportunity to verify their identity and assert eligibility. Those who fail to meet the new deadline may permanently disqualify their claims.
Claims under $50,000 could account for around $655 million in unauthorized repayments, but claims above $50,000 will be $1.9 billion, increasing the total risk funding to more than $2.5 billion, according to court documents.
FTX Court filing and presumed request. Source: Sunil
The next FTX creditor repayment is set for May 30, 2025, and is expected to be repaid to creditors with over $11 billion on claims over $50,000.
FTX’s recovery plan is expected to receive at least 118% of creditors in cash at least in 118% of their original claim value.
Related: FTX liquidated $1.5 billion in 3AC assets two weeks before the hedge fund collapse
How FTX users complete KYC
Many FTX users report issues with the KYC process.
However, users who fail to file KYC documents can resubmit their application and restart the verification process, according to an April 5 post from FTX creditors, Customer Ad Hoc Committee member Sunil.
FTX KYC Portal. Source: Sunil
Affected users will need to email FTX Support (support@ftx.com) to receive their ticket number, log in to the support portal, create an account, and re-upload the required KYC documents.
Related: Crypto Trader converts $2K Pepe to $43 million and sells it for $10 million profit
FTX Digital Markets, a Bahamian subsidiary of FTX, processed the first round of repayments in February, and distributed $1.2 billion to creditors.
The crypto industry is still recovering from the collapse of FTX, with over 130 subsidiaries launching a string of bankruptcies, leading to the longest and longest crypto winter in the industry.
While it is not an “market-powering catalyst” in itself, the beginning of FTX repayments is a positive sign of the crypto industry’s maturation, with a “slight portion” likely to be reinvested in cryptocurrency, Alvin Kan, Chief Operating Officer of Bitget Wallet, told CointeLegraph.
https://www.youtube.com/watch?v=TVMMJ6RR4SO
Magazine: XRP victory leaves “bad actors” at Ripple without a precedent set of cryptography
