FTX Rejects $2.5 Billion in Claims After KYC Deadline Miss

Over 400,000 previous users of FTX have been denied opportunities to recover their funds after missing a key deadline to confirm their identities. According to Bloomberg, the collapsed crypto firm is progressing with its repayment plans, but only to those who met its requirements. 392,000 Claims Rejected After Identity Deadline In a recent filing , the U.S. Bankruptcy Court confirmed that 392,000 claimants who failed to complete identity verification by March 3 successfully have had their claims removed. According to reports, these denied claims were over 2,377 pages of court filings. In addition, the removed claims were originally estimated to be worth around $1 billion. However, creditor advocate Sunil Kavuri disclosed the total could reach $2.5 billion. As detailed, this includes $655 million in smaller claims under $50,000 and another $1.9 billion in larger ones. Unfortunately, the court denied them because they did not submit the required identification documents before the deadline. FTX, now under new management, explained that verifying users is not optional. The company says its former leadership did not follow basic procedures like Know Your Customer (KYC) checks, which added to the problems. It was reported that the new management uses stricter standards as part of the legal process to clean up the mess left behind. Many experts believe this is a way to get the business back without any unsolved matters. FTX Creditor Payouts to Begin May 30 It is worth noting that the exchange plans to begin payments to approve creditors on May 30, 2025 . According to management, the payouts will be made in cash based on the value of assets at the time of the exchange’s collapse in November 2022. So far, the company says it has recovered $11.4 billion. These funds will be shared among users whose claims have been approved. For many, this is the first real progress since the exchange shutdown. Thousands of Claims Flagged for Fraud The new management acknowledged that the process has not been easy. While speaking to this, FTX’s legal team says it received over 27 quintillion submissions, many of which were false or inflated. Additionally, they claimed that sorting through the fake claims has slowed progress. Still, the company says it is moving closer to closing one of the largest financial disasters in crypto history. Last month, the FTX bankruptcy case shifted again as a Delaware court sided with Three Arrows Capital (3AC), allowing the defunct hedge fund to raise its claim against FTX from $120 million to $1.53 billion. The post FTX Rejects $2.5 Billion in Claims After KYC Deadline Miss appeared first on TheCoinrise.com .