TL;DR
- FTX has denied about $300M in claims from users who missed the March 3 KYC deadline, following a court order allowing non-compliant claims to be expunged.
- Additional claim disallowances by June 1 could save FTX up to $2.5B, intensifying creditor frustration over transparency and document processing delays.
- Global creditors remain in limbo, as over 160 restricted-country claimants face uncertain repayment timelines, with scheduled distributions set to resume on May 30.
FTX has taken a decisive step in its bankruptcy proceedings, denying claims worth an estimated $300 million from users who failed to initiate their Know Your Customer (KYC) process by the March 3 deadline. This move follows a court order allowing the exchange to publish and expunge non-compliant claims, significantly reducing its liabilities.
The decision has sparked frustration among creditors, many of whom argue that they submitted the required documents but received no feedback on their claim status. Some users have voiced concerns over the lack of transparency, questioning how FTX intends to allocate the savings from these denied claims.
FTX Expunged Claims
FTX expunged claims that didn't start KYC before Mar 3, 2025
1 June 25: More claims will be expunged if KYC
FTX estimates that in total:
Claims < $50k: $655m will be disallowed (incl. for non KYC)
Claims > $50K: $1.9bn will be disallowed pic.twitter.com/jFBUMovl3L— Sunil (FTX Creditor Champion) (@sunil_trades) April 3, 2025
More Claims Could Be Expunged by June
FTX’s creditor advocate, Sunil Kavuri, has warned that additional claims could be denied by June 1, the final deadline for completing the KYC process. If all remaining non-compliant claims are expunged, the exchange could save up to $2.5 billion, including $655 million from creditors with claims below $50,000 and $1.9 billion from larger claims.
The court order explicitly states that claims listed in Schedule 1 but not included in Exhibit A may still be subject to disallowance if KYC requirements are not met by the deadline. This has left many creditors scrambling to ensure compliance, fearing they may lose their chance at repayment.
Global Creditors Left in Limbo
While creditors in the U.S. and Europe are beginning to see progress in their repayment process, those in restricted countries remain uncertain about their prospects. FTX has excluded creditors from over 160 countries, including Nigeria, Egypt, Colombia, Russia, China, Ukraine, and Saudi Arabia, from the first phase of recovery.
The exchange has yet to provide a clear timeline for when these creditors will receive their funds, adding to the frustration among affected users. With Kraken and BitGo—the two distribution options provided by FTX—unavailable in many of these excluded regions, repayment in May seems unlikely.
What’s Next for FTX Creditors?
FTX plans to begin its next phase of repayments on May 30, offering some relief to creditors who have successfully completed their KYC process. Meanwhile, Backpack, the company that acquired FTX Europe, has launched its claims page, signaling potential progress for European creditors.
