FTX Rejects Nearly 400,000 Withdrawal Requests Amid KYC Violations

Liquidators of the bankrupt FTX exchange have disqualified at least 392,000 compensation claims as of April 2.

The invalidation of these claims is linked to breaches of KYC (Know Your Customer) requirements and pertains to users who did not complete the identity verification process by March 3.

The firm did not disclose the total value of the disqualified claims. According to Sunil Kavoury, a representative of FTX’s largest creditor group, the total value of these claims is estimated at $2.55 billion, with $665 million tied to claims under $50,000, while $1.9 billion comes from claims exceeding that amount.

As reported by Bloomberg, the new management at FTX views additional verification of customer accounts as essential, given that the company previously failed to conduct fundamental checks and often did not gather information about the sources of funds.

On May 30, the liquidators plan to commence compensation payments for claims exceeding $50,000.

FTX’s attorneys noted that the firm received «27 quadrillion» requests for payouts. Many of these require verification, and «billions» are expected to be fraudulent.

In February 2025, the exchange allocated $1.2 billion for compensating users with assets up to $50,000.

Additionally, it is noteworthy that Terraform Labs (TFL), the company behind the collapsed Terra ecosystem, is set to open a portal to accept compensation claims for affected users on March 31.