FTX users risk losing $2.5b in crypto repayments without KYC verification
FTX creditors risk losing $2.5B
Nearly 400,000 creditors of the bankrupt FTX exchange are at risk of forfeiting over $2.5 billion in crypto repayments if they fail to complete the mandatory Know Your Customer (KYC) verification process. Initially, FTX users had until March 3, 2025, to begin the verification, but the deadline has now been extended to June 1, 2025.
According to a court filing in the U.S. Bankruptcy Court for the District of Delaware, those who do not start the KYC process by the new deadline may have their claims entirely disallowed. Claims under $50,000 could total roughly $655 million in disallowed repayments, while claims over $50,000 might account for about $1.9 billion, reports Cointelegraph.
Upcoming repayments and industry implications
The next repayment round is scheduled for May 30, 2025, with over $11 billion expected to be repaid to creditors holding claims above $50,000. Under FTX’s recovery plan, 98% of creditors are projected to receive at least 118% of their original claim in cash. Despite the rocky road following FTX’s collapse—which precipitated the crypto winter and a significant drop in Bitcoin’s price—this repayment process is seen as a positive sign for the industry’s maturation. However, many users have reported issues with the KYC process. Those encountering difficulties are advised to email FTX support, secure a ticket number, and then re-upload the necessary documentation through the support portal.
Looking forward, as the crypto industry navigates its longest downturn in recent history, the successful completion of KYC by creditors could serve as a catalyst for renewed investor confidence. The forthcoming repayment rounds may also trigger a reinvestment of funds into the market, potentially stabilizing asset values amid ongoing regulatory and market uncertainties.
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