Nearly 400,000 former FTX users risk losing access to more than $2.5 billion in repayments if they don’t complete identity verification by June 1, 2025. A recent filing in the U.S. Bankruptcy Court for the District of Delaware revealed that about 392,000 people missed the original March 3 deadline to begin the Know Your Customer (KYC) process. The court has now extended the deadline, giving users a final chance.
If identity verification is not started by 11 a.m. UTC on June 1, users will be disqualified from any future repayments, regardless of the amount they are owed. The court filing shows these disallowed claims span over 2,300 pages, totaling approximately $655 million in smaller claims and up to $1.9 billion in larger ones.
The next repayment round is scheduled for May 30, with over $11 billion expected to be distributed to verified creditors. So far, $11.4 billion has been recovered based on user balances at the time of FTX’s collapse in November 2022. In February, the first phase of repayments returned $1.2 billion through FTX’s Bahamian branch, FTX Digital Markets.
Under the current plan, 98% of approved creditors will receive at least 118% of their original claim value in cash. The removal of a large number of unverified claims may result in higher payouts for those who complete the KYC process on time.
Some affected users have reported issues with the KYC system. On April 5, Sunil, a member of the FTX Customer Ad-Hoc Committee, posted updated instructions for reapplying. Users must email FTX support, obtain a ticket number, and re-upload their ID documents through the portal.
FTX’s collapse, involving over 130 affiliated companies, marked a major shift in the crypto industry, sending Bitcoin to lows near $16,000. While the ongoing repayments aren’t expected to move markets significantly, some analysts believe returning funds could be partially reinvested in crypto.
