FTX Creditors Face $290 Million Delay Due to Bahamas KYC Requirements

FTX creditors are facing a complex and lengthy claims process in The Bahamas, with additional requirements stemming from the region's adherence to the UK/EU legal framework. Sunil Kavuri, a creditor representative, announced on July 19th that claimants must follow extra steps, which include extensive Know Your Customer (KYC) obligations. This has led to delays in claim payouts, with around $290 million in approved claims remaining unpaid as of late June 2025, primarily due to incomplete KYC documentation.

The complexity of the process is rooted in jurisdictional differences between The Bahamas and the United States. The liquidators, led by PricewaterhouseCoopers (PwC) and Brian Simms KC, are managing the claims process as they navigate the regulatory landscape. The additional steps involve further regulatory approval and documentation, impacting creditor repayment timelines.

This development is not unique to FTX. Historically, international crypto claim processes, such as those of Mt. Gox and Celsius, have endured similar delays and complexities. The heightened regulation in The Bahamas is shaping creditor experiences, with strict frameworks resulting in orderly processes but extended timelines. Analysts anticipate that this heightened regulation could lead to increased payout confirmations once requisite approvals are secured.

The settlement between FTX's Bahamas unit and the bankrupt cryptocurrency lender Celsius Network further underscores the intricate legal and regulatory landscape that creditors must navigate. This settlement resolves a dispute over clawback claims, demonstrating the ongoing legal battles and negotiations that are part of the broader FTX bankruptcy proceedings. The resolution of these claims is crucial for creditors, as it affects the distribution of assets and the potential recovery of funds.

The FTX bankruptcy proceedings have highlighted the need for regulatory clarity and consistency in the digital asset space. The lack of a unified regulatory framework can lead to confusion and uncertainty for creditors, making it difficult for them to pursue their claims effectively. This underscores the importance of ongoing efforts to develop comprehensive and coherent regulations for digital assets, which can provide a clearer path for creditors and other stakeholders.