FTX creditor repayment process enters a new stage, creditors should act promptly

With the FTX case's actual controller being sentenced to 25 years, this sensational cryptocurrency exchange collapse case has temporarily come to a close. For many investors and creditors, what is of greater concern is the progress of the FTX bankruptcy liquidation case, which directly relates to whether they can recover their investments.

As the largest bankruptcy liquidation case in the world today and the first global bankruptcy case involving crypto assets, the handling of the FTX case will serve as a benchmark precedent of significant reference value, profoundly impacting judicial practices for a considerable period in the future.

Since 2022, the FTX case has undergone multiple claims for creditors. Due to disputes over the execution of the liquidation plan and the difficulty in completing the liquidation of FTX's bankrupt assets in the short term, the repayment path for creditors is long and arduous. Currently, the FTX liquidation entity and claims portal have been established and opened, and the repayment work for creditors is about to commence.

Background of the FTX Case and Progress of Liquidation

FTX was a top cryptocurrency exchange that was on par with Binance, established in 2019 and headquartered in the Bahamas, primarily focusing on the U.S. market. It had hundreds of affiliated companies and a global customer base, with a peak valuation of $32 billion.

At the end of 2022, due to the exposure of the problem that FTX's own issued token FTT accounted for too high a proportion of its assets, coupled with Binance's announcement to liquidate its holdings of FTT, panic in the market was triggered, ultimately leading FTX into a death spiral and collapse.

In light of FTX's bankruptcy assets in both the Bahamas and the United States, the courts of both countries have initiated relevant liquidation procedures. At the end of 2023, the Supreme Court of the Bahamas appointed joint official liquidators to oversee the liquidation of FTX Digital and its affiliated companies. Currently, the liquidators have established a dedicated FTX creditor claim website to uniformly accept various types of creditor claims. The deadline for claims submission is May 15, 2024.

FTX Creditor Declaration Guide

1. Log in to the FTX debt claim declaration and compensation portal and register an account.

2. Choose the correct type of claimant: individual customer, institutional customer, or non-customer creditor.

3. Fill in the detailed creditor and customer account information.

4. Verify the asset information of the associated FTX account. If there are any disputes, they can be reported through the dispute process.

5. For the assigned FTX bankruptcy claims, a complete assignment proof must be submitted.

6. Complete the KYC identity verification process.

Explanation about duplicate declaration

For creditors who have already filed bankruptcy claims on the KROLL platform in the United States, if they file again on the FTX bankruptcy claims portal designated in the Bahamas, it will be automatically considered as a withdrawal of the filing in the United States, and the jurisdiction of the claims will be transferred to the Bahamian court.

It is important to note that the United States and the Bahamas have reached a preliminary consensus on the liquidation of bankruptcy assets, which will be distributed as a whole after liquidation. Therefore, creditors can freely choose the jurisdiction to file, which will not affect the fairness of the final compensation. However, different applicable laws may influence specific issues such as the recognition of claims, the recognition ratio, and the handling of objections.

It is recommended that creditors consult a professional legal team before making a decision to ensure that their rights are maximally protected.