The post FTX Disqualifies $2.5B in Claims After KYC Deadline Missed by 392,000 Users appeared first on Coinpedia Fintech News FTX’s bankruptcy process just took a major turn. Nearly 400,000 customer claims worth up to $2.5 billion have been disqualified after users failed to meet the March 3 deadline for identity verification. This massive disqualification reflects a strict enforcement of Know Your Customer (KYC) rules as the collapsed crypto exchange works through its legal proceedings. 392K Claims Disqualified In a filing on April 2, the U.S. Bankruptcy Court confirmed that 392,000 FTX customer claims have been completely disqualified for failing to meet ID verification requirements. These rejected claims fill 2,377 pages of records. FTX’s move could boost recovery rates for verified users as the total liabilities against the estate are now significantly reduced. While the initial estimates valued the unverified FTX claims at around $1 billion, however creditor advocate Sunil Kavuri says that the real figure could be as high as $2.5 billion. This includes $655 million in smaller claims under $50,000 and a massive $1.9 billion in larger ones—all wiped out due to noncompliance. The company, now under new leadership, says verifying user identities is essential—especially after the previous management failed to collect basic user data or perform standard due diligence. FTX To Begin Repayment on May 30 As part of its wind-down, FTX plans to begin repaying its main group of creditors on May 30, offering full cash recoveries based on the value of assets at the time of its collapse in November 2022. So far, the exchange has recovered $11.4 billion to distribute, marking a major milestone in resolving one of the biggest financial disasters in crypto history. However, the process is far from smooth. FTX’s legal team reports receiving a staggering “27 quintillion” submissions, many of which are fraudulent or highly inflated which highlights the ongoing chaos and complexity of the case. Despite the challenges, the repayments represent a critical step forward for former users hoping to reclaim their lost funds. In other market news, Bitcoin is down 1% in the past 24 hours, trading at $83,645, while Ethereum has dipped 0.6% to $1,815. Meanwhile, the crypto world remains on edge as ongoing regulatory moves and major legal cases continue to influence market sentiment and shape the industry’s future.
