FTX Creditors Blocked as Claims from 163 Countries Rejected

The bankrupt crypto exchange declared claims from 163 jurisdictions as “not eligible” for distributions. This decision leaves many investors in the lurch.

On Feb. 18, FTX began its first round of repayments, focusing on creditors who lost up to $50,000. These individuals, classified as the “Convenience Class,” are set to receive 100% of their claims, plus 9% annual interest based on their holdings. While this was a step in the right direction, not all creditors are getting their money back.

FTX Excludes Claims from Key Countries, Leaving Creditors in Limbo

FTX creditor and advocate Sunil Kavuri recently shared a list of countries where claims have been deemed ineligible. Among them are Russia, China, Egypt, Nigeria, and Ukraine. Kavuri stated that many claimants from these jurisdictions are facing rejection and that FTX is currently reviewing its options. For those left out, this news is a bitter pill to swallow.

FTX’s decision to exclude claims from these countries adds another layer of frustration to an already messy bankruptcy case. Many affected creditors are now stuck between a rock and a hard place, with little clarity on whether they will ever recover their lost funds. The company has not provided specific reasons for the exclusions, but regulatory and legal concerns are likely at play.

FTX’s Next Payout Set for May, Creditors Must Act by April 11

Despite this setback, the repayment process continues. FTX’s next distribution round is scheduled for May 30. This phase will address claims exceeding $50,000, covering “Class 5 Customer Entitlement Claims” and “Class 6 General Unsecured Claims.” These include customers who had assets on the platform when it collapsed, as well as other creditors such as trading partners and vendors.

To qualify for the May distribution, creditors must verify their claims by April 11. Additionally, they must select a distribution agent by the same deadline. Those who fail to do so could risk missing out on their repayments altogether.

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