FTX Rejects Nearly 400,000 Claims Worth $2.5 Billion – Here’s What Happened

FTX’s bankruptcy case has just taken a big step. Nearly 400,000 customer claims—worth up to $2.5 billion—have been rejected after users missed the March 3 deadline to verify their identities. This major disqualification shows how seriously the collapsed crypto exchange is now enforcing Know Your Customer (KYC) rules as it works through legal and financial cleanup.

Huge Number of Claims Thrown Out

In a court filing on April 2, the U.S. Bankruptcy Court confirmed that 392,000 customer claims were completely disqualified for failing to meet identity verification requirements. The rejected claims take up 2,377 pages of court records.

This sharp reduction in total claims could actually help verified users. With fewer claims on the table, the chances of higher payouts for those who did complete verification may now increase.

The Real Value of Rejected Claims

While early estimates put the value of these unverified claims at around $1 billion, creditor advocate Sunil Kavuri says the actual figure could be as high as $2.5 billion. That includes $655 million in smaller claims (under $50,000) and a massive $1.9 billion in larger ones—all removed from the equation due to lack of ID verification.

Why Verification Matters Now

FTX’s current leadership says verifying user identities is critical, especially because the company’s previous management failed to gather even basic user information or carry out proper checks. The new team is working to restore order and follow standard compliance rules.

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FTX To Begin Repayment on May 30

FTX plans to start repaying its main group of creditors on May 30. The company has promised full cash repayments based on asset values from November 2022, when the exchange went under. So far, FTX has recovered $11.4 billion to distribute—a big step toward closing one of the largest disasters in crypto history.

The process hasn’t been easy. FTX’s legal team says it has received a mind-boggling “27 quintillion” submissions—many of them fake or heavily inflated. It’s a sign of how complicated and messy the case still is.

Even with these challenges, the upcoming repayments mark real progress for former users hoping to get their money back.

Elsewhere in the crypto world, Bitcoin has dropped 1% in the past 24 hours to $83,645. Ethereum is down 0.6%, now trading at $1,815. The market remains on edge as regulators and legal cases continue to affect prices and the industry’s future direction.

The scars of FTX’s collapse are still fresh—and the crypto world isn’t done feeling them.