FTX is dealing with a large number of claims from customers in countries that are currently not eligible to receive payments. These countries include Russia, China, Egypt, Nigeria, and Ukraine.
The company is now reviewing its options to handle the situation, as many affected users are eager to know if they will be able to recover their funds.
Per FTX Creditor, Sunil, among these restricted regions, China has the largest number of FTX customers, accounting for about 8% of the total.
This means a significant portion of claims are coming from users who may not be able to receive distributions under the current rules.
FTX, the cryptocurrency exchange brainchild of Sam Bankman-Fried, skyrocketed to fame, hitting a staggering $32 billion valuation by early 2022. But by November of the same year, the empire teetered on the brink when it was revealed that its sibling firm, Alameda Research, was propped up largely by FTX’s own tokens.
This bombshell triggered a wave of customer withdrawals, uncovering a massive $8 billion gap in FTX’s coffers. Struggling to fulfill these demands, FTX froze customer accounts and declared bankruptcy on November 11, 2022.
In the aftermath, Bankman-Fried stepped down, handing the reins to John J. Ray III, who blasted the previous management for its unparalleled incompetence and murky finances.
As probes into the alleged misappropriation of customer funds kicked off, the drama intensified in December 2022 when Bankman-Fried was arrested in the Bahamas, following a request from U.S. authorities, and sentenced to jail.
In January 2024, FTX announced it would not restart its operations but would liquidate its assets to repay creditors. A Delaware bankruptcy judge approved a reorganization plan in October 2024 that promised to pay 98% of creditors 119% of their allowed claims as of November 2022.
As of now, FTX has recovered nearly $16 billion to repay its customers, marking significant progress toward settling its debts.
On Tuesday, 18 February, 2025, the FTX bankruptcy estate sent $1.2 billion to customers who had claims of less than $50,000. The estate also announced plans for another round of payments in May.
FTX estate’s CEO, John J. Ray III, thanked customers and creditors for their patience as the intricate process unfolds. He noted that efforts continue to reclaim additional funds and distribute them to other claimants. Sunil clarified that these claims are restricted to specific regions.
While FTX has yet to finalize its decision, Sunil highlighted that the company is actively exploring potential ways to tackle this matter.
