Nearly 400,000 FTX Users Risk Losing $2.5B in Repayments Without KYC Compliance
Rebeca Moen Apr 06, 2025 08:45
Nearly 400,000 FTX users risk losing $2.5 billion in repayments unless they complete KYC verification by the extended June 1, 2025 deadline. Failure to comply may result in their claims being permanently disqualified.
Nearly 400,000 creditors of the bankrupt cryptocurrency exchange FTX stand to lose a combined $2.5 billion in potential repayments unless they complete the required Know Your Customer (KYC) verification by the extended June 1, 2025 deadline, according to a recent court filing.
The filing, submitted to the U.S. Bankruptcy Court for the District of Delaware on April 2, revealed that approximately 392,000 individual claims remain unverified. The original deadline for initiating the KYC process was March 3, but the court has granted an extension to give users another opportunity to validate their identities and secure repayment eligibility.
“If a holder of a claim... did not commence the KYC submission process... such claim shall be disallowed and expunged in its entirety,” the filing stated.
Claims at Risk
The court documents break down the potential impact of inaction:
Claims under $50,000: at risk of losing $655 million
Claims over $50,000: at risk of losing $1.9 billion
Total at-risk funds: over $2.5 billion
Repayment Timeline and Recovery Plan
The next round of repayments is scheduled for May 30, 2025, with over $11 billion to be distributed to creditors with verified claims exceeding $50,000. Under FTX’s recovery plan, 98% of creditors are expected to receive at least 118% of their claim value in cash.
FTX’s Bahamian entity, FTX Digital Markets, already processed a $1.2 billion repayment distribution in February 2025.
How to Complete KYC
Users who missed the initial window can still complete the verification process by:
Emailing FTX support (support@ftx.com) to obtain a ticket number.
Logging into the FTX support portal, creating an account, and uploading the required KYC documents.
Community representative Sunil, a member of the FTX Customer Ad-Hoc Committee, confirmed via social media that users can restart the KYC process if they had previously encountered issues.
Ongoing Fallout from FTX Collapse
FTX’s bankruptcy remains one of the most significant events in crypto history, with more than 130 affiliated entities entering insolvency in late 2022. The exchange’s downfall triggered what many call the longest crypto winter to date, and recovery efforts have been ongoing ever since.
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