FTX Bankruptcy Team Dismisses Non-KYC Compliant Creditor Claims

In a significant development in the ongoing bankruptcy proceedings of the embattled cryptocurrency exchange FTX, the bankruptcy team has secured court approval to reject claims from creditors who failed to complete the Know Your Customer (KYC) process by a specified deadline.

FTX Bankruptcy Team Rejects Non-Compliant Creditor Claims

The bankruptcy team of FTX has received court approval to reject creditor claims from users who failed to complete the Know Your Customer (KYC) process before March 3, 2025. The court filing on April 2 included 2,378 pages of invalidated claims, representing around 500,000 entries. The court order disallows any claim not backed by KYC compliance. Creditors were previously advised to complete KYC steps to retain eligibility for payouts. Sunil Kavuri, an activist for the creditor community, stated that more claims will be removed after June 1 if required documentation remains missing. This development impacts a significant portion of FTX’s creditors as they face the consequences of non-compliance with KYC regulations.

FTX Disqualifies $2.5B in Claims After KYC Deadline Missed by 392,000 Users

FTX’s bankruptcy process has taken a major turn, with nearly 400,000 customer claims worth up to $2.5 billion being disqualified. The U.S. Bankruptcy Court confirmed on April 2 that 392,000 FTX customer claims have been disqualified for failing to meet the March 3 deadline for identity verification. This massive disqualification reflects a strict enforcement of Know Your Customer (KYC) rules as the collapsed crypto exchange works through its legal proceedings. The rejected claims fill 2,377 pages of records, and FTX’s move could boost recovery rates for verified users.