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FTX Disqualifies $2.5 Billion in Claims After KYC Deadline Missed by Nearly 400,000 Users
In a shocking turn of events, the bankruptcy process for FTX has just taken a major blow as nearly 400,000 user claims have been disqualified due to missing a crucial deadline for identity verification.
FTX’s legal team has confirmed that an astonishing 392,000 customer claims, valued at a staggering $2.5 billion, will not be considered for repayment after users failed to comply with the March 3 deadline for Know Your Customer (KYC) requirements.
The disqualification of these claims reflects the company’s strict enforcement of KYC rules as it navigates its legal proceedings. This move is seen as a necessary step in ensuring transparency and preventing fraudulent activities within the process.
The disqualified claims include smaller ones worth under $50,000, amounting to $655 million, as well as larger claims totaling $1.9 billion. These massive sums were at risk of being distributed unfairly or even fraudulently if not properly verified.
The FTX team has emphasized that verifying user identities is crucial, especially given the previous management’s failure to collect basic user data and perform standard due diligence. This move signals a commitment to fairness and transparency in its bankruptcy proceedings.
Despite this setback, 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.
Source: https://coinpedia.org/news/ftx-disqualifies-2-5b-in-claims-after-kyc-deadline-missed-by-392000-users/
