FTX Launches $900 Million Repayment, Creditors from 45 Countries Still Locked Out and Face Six-Month Window
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FTX Launches $900 Million Repayment, Creditors from 45 Countries Still Locked Out and Face Six-Month Window
If onboarding is not completed within the six-month window period, the right to claim may be completely lost.
Navigating Web3 tides with focused insightsAuthor: CryptoSlate
Compiled by: TechFlow
TechFlow Insight: FTX's fifth bankruptcy distribution is set to launch on July 31, but only creditors who passed review by June 16 and completed onboarding with BitGo, Kraken, or Payoneer can receive funds. The trickier part is that creditors in 45 countries still cannot choose any distribution service provider, and if they fail to complete onboarding within the six-month window, they may completely lose their claim rights.
FTX has prepared approximately $900 million in compensation payments for July 31, but only creditors who passed review by June 16 and completed service provider onboarding can receive them.
FTX announced that creditors holding approved claims in Classes 5A, 5B, 6A, 6B, and 7 who meet the above conditions should receive funds via BitGo, Kraken, or Payoneer within 1 to 3 business days starting from July 31.
According to the FTX Distribution Dashboard FAQ, claims must be approved, and the original holder must complete KYC by the record date of June 16. Valid tax forms, successful completion of service provider onboarding, and sanctions screening must also be completed by that date.
Who Remains Excluded
As of press time, FTX's service provider eligibility page still displays the list from May 22, listing residents of 45 jurisdictions unable to choose a distribution service provider: Afghanistan, Algeria, Bangladesh, Belarus, Burundi, Cambodia, Cameroon, Central African Republic, Chad, China, Colombia, Democratic Republic of the Congo, Republic of the Congo, Cuba, Egypt, Equatorial Guinea, Ethiopia, Fiji, Gabon, Guernsey, Honduras, Iran, Iraq, Kuwait, Lebanon, Lesotho, Libya, Macau, Malawi, Maldives, Moldova, Morocco, Myanmar, Nepal, North Korea, Qatar, Russia, Rwanda, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, Ukraine, and Western Sahara.
FTX stated that service provider coverage may change and more options may be added, so this list is an outdated snapshot rather than a permanent ban. Currently, when no available service provider can serve a certain jurisdiction, FTX postpones the distribution.
Affected creditors must wait for coverage, monitor updates via the FTX Customer Portal and email, and then successfully complete onboarding to receive payment. Even if the portal shows options based on residence, the service provider retains final decision-making power on onboarding.
Subsequent coverage cannot restore July 31 payments for those who failed to complete onboarding by the June 16 deadline. However, it can open a path to receive subsequent distributions, provided onboarding is successful and plan deadlines are met.
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Creditors who can access service providers still face significant choices. Distribution funds cannot be split across multiple service providers, and the choice is irrevocable. By onboarding, creditors irrevocably waive the right to receive cash directly from FTX and instruct FTX to pay the selected service provider. Questions regarding funds in that service provider account subsequently shift to the service provider's support team.
The FTX Dashboard FAQ also states that approved claim holders who fail to successfully complete onboarding within six months starting from July 31 may lose their rights to that claim distribution. Missing June 16 blocks payment for this round; failing to complete onboarding within the longer term creates a separate risk of forfeiture.
Why Distributions Exceed 100%
The cumulative distribution ratios announced by FTX—105% for Classes 5A and 5B, 103% for Classes 6A and 6B, and 120% for Class 7—are not yields relative to current cryptocurrency prices. They are percentages of approved plan claims.
FTX's claims framework uses court-approved conversion tables to calculate digital asset claim values, so this percentage describes the recovery rate relative to the approved claim amount, not the asset's market value today.
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