Deadline Nears for FTX Loss Claims Amidst Prolonged Withdrawal Delays

Since FTX's collapse, recovery procedures have been ongoing to date. September 29 has now been set as FTX loss claims deadline.

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In the aftermath of the FTX cryptocurrency exchange’s bankruptcy filing in November 2022, withdrawal delays have beset its users. Shareholders hit by this tumultuous financial event can recoup some of their assets, with the clock ticking down to September 29 as the FTX loss claims deadline.

The US Bankruptcy Court for the District of Delaware made a pivotal ruling on June 29, setting September 29, 2023, as the final date for investors to lodge their claims against the defunct FTX. This extended lifeline opens doors for those who held assets on the platform before its insolvency, granting them the chance to file fresh claims.

 

Navigating the FTX Loss Claims Process

For customers seeking to initiate a claim via the FTX claims platform, a series of steps must be diligently executed. Initially, users must select the FTX-linked platform to access their accounts, necessitating more than just their FTX login credentials.

Kroll Restructuring, the administrator overseeing the claims process, continues to accept submissions from affected individuals. Even if access to their FTX accounts has been lost, claimants still have recourse through the Administration, which processes FTX claims.

Once logged in with their FTX credentials, users receive a verification email as an added security measure to confirm their identity.

The subsequent stage involves submitting Know Your Customer (KYC) information, encompassing government-issued identification and evidence of residence. These can include utility bills, bank statements, or tax returns.

Upon successful KYC validation, users may opt for the “File Proof of Claim” feature within the FTX claims platform. Account balances presented therein must align with accuracy. Any disputes regarding displayed amounts can be addressed by submitting a new “File Proof of Claim” on the Kroll website. This is along with pertinent supplementary information or corroborating evidence.

 

Security Breach Incites Temporary Portal Closure

The claims portal temporarily shuttered its virtual doors in the wake of a security breach. However, swift action ensured its return with reinforced security measures. FTX has affirmed that customers’ monetary assets and login information remain secure.

Notably, the claims portal caters to FTX and affiliated entities, including FTX US, Blockfolio, FTX EU, FTX Japan, and Liquid, providing a lifeline for those who have previously held accounts with these platforms.

The process has seen the submission of 36,075 customer claims against FTX and FTX US. This has resulted in settlements amounting to $16 billion. Furthermore, FTX has reported 2,300 non-customer claims linked to companies such as Genesis, Celsius, and Voyager. These have a total valuation of $65 billion.

Accounts were temporarily frozen as a precautionary measure, followed by enhanced security measures to safeguard user interests. Nonetheless, some users have voiced concerns regarding issues with the claims portal in recent times.

 

Temporary Ban on Asset Sales and Uncertainty Looms

In a significant development, the Delaware bankruptcy court has greenlit the sale of FTX’s digital assets. This decision, issued on September 13, allows FTX to liquidate assets through an investment adviser while adhering to stringent guidelines. The initial weekly limit for asset sales is $50 million, with subsequent weeks and months capped at $100 million each.

Notably, a temporary ban has been imposed on selling Bitcoin, Ether, and specific insider-affiliated tokens held by FTX, pending independent decisions following a 10-day notice period to relevant committees and the U.S. trustee.

Amidst these proceedings, skepticism is brewing among stakeholders. FTX’s request for additional information, including income tax returns or paystubs from the past six months, has raised eyebrows. Some users argue that FTX already possesses their primary KYC data. This leaves uncertainty about how current income details would impact their claims.

 

Ongoing Turmoil and Uncertain Resolution in FTX loss claims

As millions of users grapple with restricted access to billions of dollars stranded within the enigmatic FTX exchange, doubts persist. A recent phishing attempt on former users’ FTX-registered emails, occurring shortly after a SIM swapping attack on Kroll, the bankruptcy claims agent, exacerbated concerns about user data security.

The ultimate resolution of FTX’s bankruptcy proceedings remains shrouded in uncertainty. FTX creditors express mounting unease over the escalating costs of the bankruptcy process, which have now soared to $328 million. Attorney Brian Glueckstein, representing FTX, has tentatively pegged the settlement of the company’s bankruptcy between April and June of 2024.

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