FTX has recouped about $14.5 million in small claims against political donation beneficiaries in November. The settlement details obtained were sent as part of the exchange’s recent filing to the Bankruptcy Court for the District of Delaware. The settlements were in tiny sums, with $2,900 received from Jared Moskowitz in Congress and $7,500 from the Vermont Democratic Party.
However, the exchange also recorded huge recoveries, receiving $6 million and $3 million from the House Majority PAC and Senate Majority PAC respectively. The settlements are a major boost for the company after it initiated a lawsuit to recover donations made by its previous CEO executives to political groups and campaigns. The recovered sum is still small compared to the funds that the exchange plans to pay out to creditors.
FTX and 3AC disagree over the claims figure
Despite its slight success with the small claims, FTX is still locking horns with bankrupt hedge fund Three Arrows Capital (3AC). According to 3AC, FTX owes them more than the figure it is planning to return, filing a claim last month to adjust the figure from $120 million to $1.5 billion. While FTX has rubbished the claims, saying that it happened after the deadline, 3AC claims they were already in possession of the account data. The exchange also mentioned that the damages were a result of market forces and not any fault of theirs.
In response, 3AC’s bankruptcy administrators have issued a reply, noting that FTX was at fault for refusing to reply to its motion. In its filing, 3AC also revealed that FTX’s claims were above the $6.5 billion reserves, overshooting allowed claims by $3.4 billion. 3AC is also ready to fight the claims, signaling its intention to depose three former executives at the company. One such executive, Ryan Salame, is also fighting a lawsuit initiated by FTX.
Uncertainty clouds creditor payments timeline
After FTX’s back and forth over the last two years, its creditors are still in the dark about when the payments of funds will begin. Most are looking at March 2025 for the first round of payments, with the payments targeting creditors owed below $50,000. However, according to bankruptcy attorney Nicholas Hall, the timeline may be unrealistic. The company’s filings showed there is a receptive attitude towards KYC from its users.
He claimed that with the low turnout, FTX may encounter issues processing the remaining payments. He also said that claimants have until June 1 to complete their verification with a likelihood of losing their funds if they don’t do it. “Even if everyone scrambles to meet these dates, FTX still needs time (likely months) to vet submissions, ensure compliance, and finalize the claims register. Realistically, this pushes first meaningful distributions toward late 2025,” he said.
Hall blamed the exchange’s poor history of keeping records on the slow verification on its platform. It also made KYC and data verification hard, an integral part of the verification. He noted that claims are still not resolved and have led to the bankruptcy estate holding on to those funds. FTX has petitioned the court to allow it to hold $6.5 billion, which Hall believes will remain with the exchange until the KYC backlog is cleared. With the scope of the issues, Hall puts funds disbursement around Q4 2025.