Imagine waking up one morning to find out that your hard-earned money is being held hostage by a defunct cryptocurrency exchange, all because you missed a deadline for a verification process. Chances are high this can be reality for many, so listen up!
FTX is disallowing claims worth $2.5 billion from customers who failed to complete their Know-Your-Customer verification by March 3. $2.5 billion, gone, just like that.
Control
Over 392,000 customers are affected, with claims ranging from under $50,000 to $1.9 billion. The initial estimate was around $1 billion, but it seems the situation is far more dire.
Sunil Kavuri , an FTX creditor activist, has shed light on the breakdown, as $655 million in claims under $50,000 and a mind-boggling $1.9 billion for those above that threshold.
FTX Expunged Claims
FTX expunged claims that didn't start KYC before Mar 3, 2025
1 June 25: More claims will be expunged if FTX doesn't receive KYC docs
FTX estimates that in total:
Claims < $50k: $655m will be disallowed (incl. for non KYC)
Claims > $50K: $1.9bn will be… pic.twitter.com/9TLCyRqetA— Sunil (FTX Creditor Champion) (@sunil_trades) April 3, 2025
It’s a harsh reminder that in the world of crypto, verification is king if you use third party services.
Now, you might wonder why FTX is being so strict about KYC, and the answer is that actually it’s about cleaning up the mess left by its former leadership.
John Ray, the interim CEO, has made it clear that verifying customer accounts is unavoidable because, let’s face it, the old guard didn’t exactly do their due diligence.
They didn’t bother to check where the money was coming from, and now everyone’s paying the price.
Deadline
But don’t think this is the end of the story. There’s another deadline looming, June 1. If customers don’t get their KYC documents in order by then, they risk losing their claims altogether.
It’s a ticking time bomb, and the clock is running out fast. The bankruptcy estate is clear, no verification, no payout. It’s as simple as that.
Effective alturism
Despite all this chaos, FTX is still optimistic about repaying its debts. The company plans to distribute between $12.6 billion and $16.5 billion to customers, which is a significant amount, but it’s little comfort to those who are being left behind.
The story of FTX is a quite painful reminder that in the crypto market, trust is a luxury you can’t afford to take for granted.
So, if you’re one of the unlucky ones, you might want to get moving on that KYC process. And fast.
Have you read it yet? Crypto’s regulatory tightrope isn’t a bad thing, after all?
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