FTX Creditors in Russia, China, Nigeria, Ukraine Await Reimbursements

FTX, the once-thriving cryptocurrency exchange, has left creditors in several countries, including Nigeria, Russia, China, and Ukraine, in limbo as they await reimbursements. Despite making up a significant portion of FTX's user base, these creditors have been excluded from ongoing distributions, according to Sunil Kavuri, a representative of the FTX Creditors' group.

Kavuri revealed that FTX is exploring ways to compensate creditors in multiple countries, including Russia, China, Egypt, Nigeria, and Ukraine. However, he did not specify why these creditors are ineligible for reimbursements. FTX's management is actively working on potential solutions to address the issue, offering some clarity to affected users who have been waiting for reimbursements.

FTX processed its first round of payments to smaller creditors on Feb. 18. However, customers in restricted countries have yet to receive funds, and there is no official timeline for resolving their claims. The exclusion of these creditors is not entirely unexpected, considering that Kraken and BitGo—the designated distribution platforms—are unavailable in most of these regions.

Meanwhile, FTX has prioritized smaller creditors, fully reimbursing those with approved claims under $50,000. These individuals also received 9% annual interest accrued since the company filed for Chapter 11 bankruptcy in November 2022. More significant creditors—those with claims exceeding $50,000—are expected to start receiving payments in the second quarter of this year.

FTX collapsed in November 2022 following allegations of financial misconduct and fraud. Former CEO Sam Bankman-Fried was later sentenced to 25 years in prison. However, he continues to insist that FTX was not insolvent but instead faced liquidity challenges at the time of its bankruptcy.