FTX Delays $2.2B in Creditor Payments
Bankrupt cryptocurrency exchange FTX faces a significant hurdle in its repayment efforts. Over $2.2 billion in creditor claims remain disputed, delaying the distribution of funds to affected users. While FTX has already distributed $5 billion in digital assets to eligible creditors in its second payment round (May 30th), a substantial portion of repayments are caught in a backlog of unresolved disputes.
Disputed Claims and Unresolved Issues
According to Sunil, a member of the FTX creditor and Customer Ad-Hoc Committee, approximately 30% of allowed claims ($7.5 billion) are currently disputed. This leaves $10.6 billion in total estimated allowed claims, with a significant portion awaiting approval. Sunil expressed optimism that most of these disputes will be resolved in the next distribution round. However, challenges remain, particularly with Chinese claims, which constitute 8% of the total claims. The timeline for these payments is uncertain until a distribution provider supporting China is announced.
The FTX estate maintains $6.5 billion in reserves specifically earmarked for these disputed claims.
KYC Verification Challenges
Many FTX creditors report difficulty completing the Know Your Customer (KYC) verification process. Delays and extensive requests for documentation are causing frustration among users. One creditor reported a five-month wait for a KYC approval from the Bahamas. Others cited stringent inquiries regarding income sources, deeming the process overly intrusive.
FTX's Response and Partnerships
FTX has partnered with Payoneer, adding to its existing distribution partners, BitGo and Kraken. Payoneer’s global reach is expected to facilitate retail customer payouts. However, the timeline for the next payment round and clarification on outstanding claims remain unclear.
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