FTX Creditor Updates

Sunil Kavuri, the FTX creditor activist, announced that certain jurisdictions are ineligible for FTX claims due to custodial exchange restrictions. The FTX bankruptcy trustee is exploring options for claim repayments in various countries, including Russia, China, Nigeria, Ukraine, and Egypt.

Kavuri presented a pie chart from November 2022, indicating that China has the largest share of ineligible creditors, accounting for about 8% of the global customer base. On January 17th, he stated that FTX creditors from countries like Egypt, Iran, Nigeria, Ukraine, China, Russia, and Saudi Arabia cannot receive claims through BitGo and Kraken, with over 20 countries affected by these exclusions.

Kavuri noted that regulatory hurdles and cross-border payment issues contributed to these restrictions, though reasons varied by country. The FTX creditor group previously estimated initial repayments would begin in February. Creditors on Kraken with claims under $50,000 confirmed via Reddit that they began receiving refunds.

Concerns Over Jurisdictional Exclusions

> FTX Claims
> A lot of claims are from jurisdictions not eligible at the moment, such as:
> Russia, China, Egypt, Nigeria, Ukraine
> FTX is reviewing options. China is the largest with 8% of customers.
> — Sunil (FTX Creditor Champion) (@sunil_trades) February 21, 2025

Kavuri mentioned that crypto investors from about 26 countries, including Egypt, Iran, Nigeria, Ukraine, China, Russia, and Saudi Arabia, are excluded from BitGo and Kraken distributions. The bankrupt FTX exchange estimated debts of $11.2 billion to creditors.

In October 2024, FTX announced recovery efforts leading to $14.7 billion to $16.5 billion available for distribution. Following the collapse in November 2022, nearly 98% of creditors under a court-approved plan were set to receive 119% of their claims.

The FTX customer portal updated listings of Distribution Service Providers by residence, outlining offerings per country. Creditors must complete KYC and Tax Compliance before choosing a provider, with no ability to split distributions across multiple providers.

FTX Allocates $1.2B for Customer Refunds in February

Kavuri tracked that FTX had issued $800 million from a $1.2 billion refund plan, with 162,000 accounts (representing 35%) of eligible claims receiving payments. Refunds were split equally between original FTX customers and debt buyers. Payments were processed through BitGo and Kraken, with funds expected in accounts within one to three days.

FTX initially earmarked $7 billion for refunds, aiming for a total of $17 billion. However, claims across all groups reached $11.75 billion, with recovery rates varying by claim type: secured and customer claims are seeing recoveries between 100% and 142%, while overall rates range from 123% to 138%.

FTX plans to repay convenience class creditors within 60 days of a reorganization plan, targeting payouts by March 4, 2025—these creditors make up about 90% of eligible creditors.

> “Our work is not over — we intend to continue our recovery efforts and return funds to additional claim classes.”
> –John J. Ray III, plan administrator of the FTX Recovery Trust

Kavuri emphasized that creditors must verify claims by April 11th to qualify for the next distribution in May, with the total value scheduled for refunds estimated between $14.5 billion and $16.3 billion.