FTX Bankruptcy Proceedings
In the ongoing fallout from the FTX bankruptcy proceedings, users are increasingly vocal about their struggles to recover a staggering $2.25 billion in claims that remain unresolved. The beleaguered cryptocurrency exchange, which has sparked countless lawsuits, is under pressure as its Recovery Trust undertakes the second round of creditor payments, distributing over $5 billion in digital assets since May 30.
Creditor Claims and Disputes
According to Sunil, a member of the Customer Ad-Hoc Committee and an FTX creditor, the total allowed claims currently stand at over $7.5 billion, with estimations reaching as high as $10.6 billion. Worryingly, a substantial 30% of these claims are disputed, leading to frustration among creditors eager for resolution.
“Legitimate claims will be acknowledged,”
he shared in a post on X on June 11.
Reserves and Future Claims
The FTX estate boasts additional reserves amounting to $6.5 billion, which are earmarked for the remaining disputed claims. Sunil anticipates that most of these claims may receive approval during the next distribution cycle. However, he cautions that uncertainty looms over a segment of claims involving Chinese investors, who constitute approximately 8% of the overall claims. The timeline for addressing these claims is still unclear, pending the appointment of a distribution provider that can cater to the Chinese market.
Distribution Partnerships and Challenges
As the situation develops, Cointelegraph has sought comments from FTX regarding the timeline for upcoming repayment rounds and the status of outstanding claims. Earlier this year, on February 18, FTX had already distributed $1.2 billion to creditors with claims of under $50,000.
In a bid to streamline future distributions, FTX announced on Tuesday its latest collaboration with Payoneer, adding to its existing distribution partnerships with BitGo and Kraken. Payoneer, known for its global payment solutions across more than 190 nations, is expected to facilitate payouts primarily for retail customers.
Creditor Frustrations
However, not all creditors are finding the process seamless. Multiple users have voiced their frustration over difficulties with the Know Your Customer (KYC) verification, a crucial step for accessing repayments. One user expressed exasperation about the long wait for information regarding KYC procedures in the Bahamas, while another creditor with a modest claim below $5,000 felt overwhelmed by repeated demands for documentation regarding their income source.
Market Implications
Despite these headaches, some market analysts speculate that as FTX works through these repayments, the potential influx of liquidity could foster improved market sentiment and liquidity in the wider cryptocurrency realm.
