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- FTX disqualified 392,000 claims after users missed the KYC deadline set for March 3, 2025.
- Users who began KYC still have time until June 1, 2025, to complete it.
Imagine waiting two years to claim your funds from a crypto exchange that went bankrupt, only to find out that you failed to do so because of one thing: you forgot or missed your identity verification. That’s what happened to 392,000 FTX users. Their claims? A total of about $2.5 billion—and all of them are now considered void.
According to Bloomberg Law, the news comes after FTX set a Know Your Customer (KYC) deadline of March 3, 2025. Users who failed to complete the process by that time were immediately disqualified from the claim process. In a sense, their money is now gone, at least from a legal standpoint.
Since the massive scandal that dragged FTX into bankruptcy, new administrators have had to ensure that funds are distributed only to verified parties.
“FTX needs to verify customer accounts because the previous company failed to perform basic due diligence on customers and often failed to collect information about the source of funds sent to the exchange,” said John J. Ray III, a liquidation expert who now runs FTX.
June Deadline Offers a Last Chance at Recovery
However, not all doors are closed immediately. For those who have started the KYC process but have not completed it, there is still time until June 1, 2025, to complete all documents and processes. Past that date? Yes, the potential for losing funds becomes a reality.
On the other hand, FTX has also started running an initial distribution to creditors who are included in the “Convenience Class” category. For the next distribution, the recording date is set for April 11, 2025, and payment is scheduled for May 30, 2025. Creditors who do not meet the requirements before that date risk losing their turn to disburse funds.
FTX Europe Begins to Unfreeze After Backpack Deal
Meanwhile, FTX’s European subsidiary, which had been frozen, is now starting to show movement. After being acquired by crypto company Backpack for $32.7 million in January 2025, FTX European customers are now being directed to go through the KYC process as an initial step before receiving funds. Although there is no definite date yet, the disbursement process is said to be underway after this stage is completed.
On the other hand, CNF previously reported that Sam Bankman-Fried, former FTX CEO, is currently serving a 25-year prison sentence after being convicted of an $11 billion fraud and money laundering scheme in 2023.
To make matters worse, he is now in solitary confinement due to an illegal interview with Tucker Carlson. Just imagine, from a penthouse to a solitary cell with no one to talk to—a complete 180-degree life change.
Not Just Administration, But About Trust
At first glance, this identity verification process may sound like a simple administrative matter. But for thousands of FTX users, this is like the last bridge to connect the past with the hope of the future.
Moreover, after the massive losses and trauma of trust in the crypto platform, the process of recovering funds has become very important. The problem is, not everyone is following the developments closely enough.
If you think everyone must be aware of the importance of KYC in a situation like this, the reality is different. Some ignore emails, some are confused because they don’t know the process, and some think it is not important. But in the post-FTX crypto space, there is no room for slack.
