FTX Creditor Claim Guide: How to Protect Your Rights in the Latest Liquidation Plan

With the main perpetrators of the FTX case being convicted and punished, the case has entered a new phase. For most investors and creditors, the biggest concern is how the FTX bankruptcy liquidation will proceed, as this directly relates to whether their claims can be effectively settled.

As one of the largest bankruptcy liquidation cases in the world today, the handling of the FTX case has attracted significant attention from global investors. At the same time, it will also serve as an important reference for dealing with the bankruptcy of multinational cryptocurrency enterprises, having a profound impact on judicial practice for the foreseeable future.

Since the collapse of FTX in 2022, the creditor claim filing process has gone through multiple rounds. However, due to disputes over the execution of the liquidation plan and the difficulty in completing the liquidation of FTX's assets in the short term, the road to recovery for creditors remains long. Now, the FTX liquidation entity and the claim platform have been established and opened, and creditor recovery is about to begin. This article will provide a detailed introduction to the specific process and precautions for FTX creditor claim filing.

Background of the FTX Case and the Liquidation Team Situation

FTX was established in 2019 and was once a top cryptocurrency exchange on par with Binance. Its headquarters is located in the Bahamas, with its main business focused in the United States. FTX is large in scale, with hundreds of affiliated companies and customers around the world, and was valued at as much as $32 billion after fundraising in 2022.

The collapse of FTX began at the end of 2022 when a media outlet revealed that the assets of FTX's affiliated company Alameda Research were heavily reliant on the FTT tokens issued by FTX itself. Panic then spread in the market, making it difficult for FTX to continue, and it quickly entered bankruptcy proceedings.

Due to FTX having business and assets in both the Bahamas and the United States, courts in both countries are involved in the liquidation process. In November 2022, the Supreme Court of the Bahamas appointed a provisional liquidator to initiate the liquidation process of FTX Digital. In February 2023, the Delaware court in the United States also recognized the provisional liquidation in the Bahamas.

At the end of 2023, the Bahamas Supreme Court appointed official joint liquidators (JOL), responsible for liquidating the assets of FTX Digital and its affiliated companies and compensating creditors. Currently, JOL has established a dedicated website for FTX creditor claims, which uniformly accepts claims from customers, non-customers, and assigned creditors. The deadline for claims is May 15, 2024.

Detailed Guide for Claiming Debts on FTX

1. Register Claim Account

First, visit the FTX creditor claim website:

Click the blue button in the upper right corner to register an account, fill in your name, email, country, and other information. Be sure to use a reliable email, as you will need the email verification code for each login.

Select the correct type of claimant:

• Individual Customers: Register and use the FTX platform in your personal name
• Institutional clients: Register FTX accounts with corporate entities such as companies.
• Non-customer creditors: Those with other creditor-debtor relationships with FTX, such as employees, suppliers, etc.

2. Register creditor and account information

For FTX customers, simply submit your FTX account registration information to link the account.

After completing the association, carefully verify that the displayed account balance and assets are accurate. If there are no errors, confirm to proceed to the claims process.

If there are any disputes regarding account assets, additional materials must be provided through the Dispute Portfolio procedure. It is advisable to consult professionals to assist in preparing the declaration materials, especially for non-customer creditors.

For the assigned FTX bankruptcy claims, a complete assignment proof must be submitted. If the claims are secured, relevant certificates must also be submitted.

The KYC identity verification process has been completed, and the debt claim is now complete.

Does the claim of ### declared in KROLL need to be declared again?

The Delaware court in the United States has accepted the bankruptcy case of FTX Trading Ltd., with KROLL responsible for registering claims. Many investors have already filed claims on the KROLL platform, so is it still necessary to file again in the Bahamas?

First, it is necessary to clarify that re-declaration on the Bahama platform will produce two legal effects:

1. Considered as a withdrawal of the declaration on the KROLL platform
2. The rights and obligations are subject to the jurisdiction of the Bahama courts.

Secondly, the United States and the Bahamas have reached a preliminary consensus on the liquidation of bankruptcy assets, which will be allocated as a whole after liquidation. Therefore, filing in the Bahamas effectively gives creditors the opportunity to choose the jurisdiction and applicable law, but it will not lead to substantive differences in recovery.

This choice mainly affects procedural issues such as debt recognition, recognition ratio, and objection handling. It is recommended to consult a professional legal team before making a selection to protect one's maximum interests.