FTX creditor Sunil reveals gaps in jurisdiction insolvency claims

FTX creditor activist Sunil Kavuri announced today that some jurisdictions are not eligible to distribute FTX claims via Custodial Exchange due to restrictions in these countries. Kavuri pointed out that the FTX bankruptcy trustees are currently seeking ways to delegate claim repayments in their jurisdictions, including Russia, China, Nigeria, Ukraine and Egypt.

Kabouri Share The detailed “FTX Global Customer Distribution” pie chart of the November 2022 bankruptcy hearing identified China as the largest jurisdiction that is not eligible for FTX claim distribution, with around 8% of the global customer base. On January 17, Kavuri alleged that FTX creditors from countries such as Egypt, Iran, Nigeria, Ukraine, China, Russia and Saudi Arabia were unable to receive the claim through detained exchanges Bitgo and Kraken. In total, Kavuri highlighted more than 20 countries that were excluded from payments processed by Kraken and Bitgo.

According to Kavuri, the exact reasons for each country were not clear, but it is likely that regulatory hurdles and cross-border payment issues were important factors behind these restrictions. Representatives of the FTX Creditors Group had previously predicted that the initial repayment would begin in February. Kraken’s FTX creditors confirmed that refunds began landing in their accounts after receiving a charge of less than $50,000 via Reddit on Tuesday.

FTX creditors raise concerns about exclusion of jurisdiction

FTX claims

Many claims come from jurisdictions that do not qualify for current FTX distributions, including:

Russia, China, Egypt, Nigeria, Ukraine

FTX checks options

China is the biggest on 8% of its customers at pic.twitter.com/ts1itoqhal

– Sunil (FTX Creditor Champion) (@sunil_trades) February 21, 2025

FTX creditor Kavuri said crypto investors from nearly 26 countries, including Egypt, Iran, Nigeria, Ukraine, China, Russia and Saudi Arabia, were not eligible for distribution by FTX by either BITGO or Kraken . A detained exchange. The bankrupt FTX Exchange previously estimated it owed about $11.2 billion to its creditors.

FTX said in October 2024 it recovered assets between $14.7 billion and $16.5 billion for distribution. As of November 2022, when the exchange collapses, almost 98% of FTX creditors under a plan approved by Delaware Bankruptcy Judge John Dorsey are set to receive 119% of the allowed claims. It was being done.

The FTX Customer Portal has published an updated list of available “distribution service providers” based on your country of residence, including a brief description of the offerings provided by each country. All creditors had to complete KYC (step 3) and tax compliance (step 7) before selecting and onboarding a distribution service provider. Additional distribution service provider options that become available over time will be updated according to FTX. Importantly, customers are not allowed to split their billing distributions across multiple distribution service providers or make changes when selections are made.

FTX will secure $1.2 billion to start customer rebates in February

Kavuri tracked the refund process and revealed that FTX Exchange has already paid $800 million from its $1.2 billion distribution. He added that 162,000 accounts, which account for 35% of the 460,000 eligible claims, have been paid up to date. The refund was split evenly, with 50% being sent to the original FTX account holder, and the other half went to the debt buyers who scooped up the bill with a sudden discount. Payments will be processed through Bitgo and Kraken, and recipients will receive funds on their accounts between one and three business days.

Kavuri previously revealed that FTX has secured $7 billion in this distribution phase, with its ultimate goal being refunded $17 billion in face value. However, the FTX Creditor Collection Summary estimated that the total claims for all creditor groups were totaled up to $11.75 billion, with the recovery rate being dependent on the type of claim. Estimates show that in secured claims and customer claims, recovery rates ranged from 100% to 142%, with overall recovery rates ranging from 123% to 138%.

FTX says it will repay convenience class creditors within 60 days of the court-approved reorganization plan, suggesting that payments will be available before March 4, 2025. Convenience class creditors make up about 90% of all eligible creditors on FTX.

“Our work is not finished. We intend to continue our recovery efforts and return the funds to additional claims classes.”

–John J. Ray IIIFTX Recovery Trust Planning Manager

Kavur also said that creditors must verify their claim by the record date of April 11th and qualify for the next distribution in May. FTX estimates the total amount of refunds scheduled for the May distribution will range from $14.5 billion to $16.3 billion.