FTX Debtors were able to recover more than $14 million from 27 minor settlement claims. The exchange’s dispute regarding its motion to elevate claims from $120 million to $1.5 billion was refuted by 3AC.
In November, the FTX Bankruptcy estate resolved 27 minor claims against recipients of political donations. The exchange administrators reported that they had received approximately $14.5 million from the settlements in a filing at the US Bankruptcy Court for the District of Delaware.
The majority of the settlement consisted of modest sums, with payments as low as $2,900 from Jared Moskowitz for Congress and $7,500 from the Vermont Democratic Party. Nevertheless, the House Majority PAC and Senate Majority PAC both experienced substantial recoveries, with the former returning $6 million and the latter $3 million.
Over the past few months, the FTX estate has implemented the minor estate claims order against numerous entities in order to recover funds that were donated to political campaigns and groups by the exchange’s former executives. The recoveries are a significant victory for the estate. The recovered funds, however, are insignificant in comparison to the billions of dollars that the insolvent exchange is currently holding and intends to distribute to creditors.
In the interim, FTX continues to face additional claims from entities that assert that the exchange owes them more than it acknowledges. Last month, Three Arrows Capital (3AC), an insolvent crypto hedge fund, submitted a motion to modify its claims from $120 million to $1.5 billion.
FTX has already objected to this expansion, stating that it is unfounded and occurred after the deadline, whereas 3AC had access to the account data prior to the deadline. The exchange also asserted that the damages alleged were market-driven and not the result of its actions.
The hedge fund, which is currently insolvent, is collecting evidence to substantiate its claims. This includes a pending deposition motion against three former executives who are currently in prison: Sam Bankman-Fried, Ryan Salame, and Caroline Ellison, as well as a subpoena issued to Nishad Singh. Salame has retained solicitors to represent him in response to a clawback lawsuit emanating from FTX.
The exchange’s creditors are still awaiting the distribution of their funds, despite the fact that the legal spectacle surrounding the FTX Bankruptcy has lasted for two years. People anticipate that the initial distribution will occur by March 2025, at which point those with claims that are less than $50,000 will receive their payments.
Nevertheless, bankruptcy counsel Nicholas Hall is of the opinion that the expectation may be overly optimistic. He observed that according to recent filings, the number of claimants who have successfully completed KYC verification remains extremely low, with only 159,237 customers having completed the process. Claim processing is currently underway for 30,154 claims, while 451,735 claims have yet to commence.
