FTX Creditors Rep Highlight Ineligible Countries in FTX Payouts

Sunil Kavuri, a representative from one of FTX Exchange’s creditors group, recently visited X to provide information about countries restricted from participating in FTX repayment. The reason for their ineligibility concerns the current distribution channels that the defunct exchange utilizes. 

Jurisdictional Challenge For FTX Creditors

In his update, Kavuri listed Nigeria, Russia, Saudi Arabia, Ukraine, China, Iran, and Egypt as countries that are currently ineligible for payouts through Bitgo and Kraken. FTX acknowledges that residents in these regions have accounts with the two partner crypto exchanges, but jurisdiction rules in such countries impede them. 

FTX Claims Distribution Update

FTX creditors in countries including Egypt, Iran, Nigeria, Ukraine, China, Russia, Saudi Arabia are not currently eligible for distribution with the current distribution providers @bitgo @krakenfx despite FTX recognizing, creditors may have an… pic.twitter.com/GwgJylCNvU

— Sunil (FTX Creditor Champion) (@sunil_trades) January 17, 2025

This means that the countries, as mentioned earlier, are categorized under the list of jurisdictions not eligible for compensation through Kraken and Bitgo.

According to the list updated on January 16, 2025, 156 other jurisdictions fall into this category. In the meantime, FTX is allegedly engaged in a review of the eligible jurisdictions and plans to publish any change made to the list on its portal.

FTX Kickstart Repayments Under New Reorganization Plan

After so many months of waiting, the FTX reorganization plan officially took effect on January 3, 2025. 

This long-awaited plan, which involves active repayment of eligible users, will go a long way in resolving the bankruptcy issue of FTX. The first repayments in the reorganization plan prioritize claimants with small claims, around $50,000 or less. It aims to compensate 98% of FTX users with payouts exceeding 100% of their declared holdings, providing some relief to a broad base of affected customers.

The exchange has set January 20 as the deadline for users to fulfill pre-distribution requirements for claims of up to $50,000

FTX Creditors Talk About Basis of Repayment

Despite the steps taken by the defunct exchange, several creditors are still concerned that the basis of the repayments is on the valuation of cryptocurrencies as of November 2022. 

This was the time when FTX officially filed for Chapter 11 bankruptcy. Their concern stems from the fact that their repayment will be at a loss. For instance, Bitcoin has surged over 370% since FTX’s collapse. Hence, repayment at old rates will short-change FTX creditors.

In the long run, FTX intends to hand back $1.2 billion to the users affected by its crash three years ago.