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FTX Bankruptcy estate settled 27 small claims against political donation beneficiaries in November. In a filing before the US Bankruptcy Court for the District of Delaware, the exchange administrators noted that they recovered about $14.5 million from the settlements. 
Most of the <a href="https://restructuring.ra.kroll.com/FTX/Home-DownloadPDF?id1=MzI4NzUyMg==&amp;id2=-1" rel="nofollow noopener" target="_blank">settlement</a> involved small amounts, sometimes as low as $2,900 from Jared Moskowitz for Congress or $7,500 from the Vermont Democratic Party. However, there were still some large recoveries, with the House Majority PAC and Senate Majority PAC returning $6 million and $3 million, respectively. 
The recoveries mark a major win for the FTX estate, which instituted the small estate claims order against several entities over the past few months to recover money donated to political campaigns and groups by the exchange’s former executives. However, the recovered funds represent a minute amount compared to the billions of dollars the bankrupt exchange is currently sitting on and planning to distribute to creditors. 
<h3 id="span-style-font-weight-400-ftx-and-3ac-locked-in-dispute-over-claims-span">FTX and 3AC locked in dispute over claims&nbsp;</h3> 
Meanwhile, FTX is still contending with other claims by entities that believe the exchange owes them more than it acknowledges. One such entity, the bankrupt crypto hedge fund <a href="https://x.com/sunil_trades/status/1866482225019011155?s=46" rel="nofollow" target="_blank">Three Arrows Capital (3AC)</a>, filed a motion last month to adjust its claims from $120 million to $1.5 billion. 
FTX has already objected to this expansion, noting that it is baseless and that it happened after the deadline, whereas 3AC had access to the account data before the deadline. The exchange also claimed that the damages alleged were market-driven and not due to its actions. 
However, 3AC bankruptcy administrators have now filed a reply to the objection, noting that FTX failed to respond early to its motion and that the deadline did not pass as the British Virgin Islands (BVI) six-year statute of limitation applies here. They also noted that FTX has a disputed claims reserve of $6.5 billion, which is $3.4 billion above allowed claims. 
The bankrupt hedge fund is already gathering evidence to prove its claims with a pending deposition motion against three former executives now in prison – Sam Bankman-Fried, Ryan Salame, and Caroline Ellison – and a subpoena against Nishad Singh. Interestingly, <a href="https://x.com/historian_ftx/status/1866658407903793658?s=46" rel="nofollow" target="_blank">Salame</a> is facing a clawback lawsuit from FTX and has hired attorneys to defend himself. 
<h3 id="span-style-font-weight-400-uncertainty-about-when-creditors-will-be-paid-span">Uncertainty about when creditors will be paid</h3> 
After two years of legal drama surrounding FTX Bankruptcy, the exchange’s creditors continue to wait for the distribution of their funds. Many expect the first distribution to happen by March 2025, when those with claims below $50,000 will be paid. 
However, bankruptcy attorney <a href="https://x.com/nicholashall/status/1864370112179925007?s=46" rel="nofollow" target="_blank">Nicholas Hall</a> believes that the expectation might be unrealistic. He noted that recent filings show that the number of claimants who have completed KYC verification is still very low, with only 159,237 customers completing their verification. 30,154 claims are in process, while 451,735 claims have not even started. 
According to him, the large number of creditors who have yet to complete KYC suggests that processing the remaining claims will be a massive administrative challenge, as FTX will have to verify every submission. Hall further noted that all claimants must complete their KYC by June 1, 2025, as failure could result in creditors losing their claims. 
He said: 
<blockquote>
 “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.”
</blockquote> 
The legal expert blamed the slow and laborious claims verification process on the exchange’s poor record-keeping before the bankruptcy petition, which made KYC and transaction data important for FTX in verifying claims. He noted that several claims against the defunct exchange are still unresolved, forcing the bankruptcy estate to reserve funds. 
FTX has already asked to hold back around $6.5 billion, and Hall believes that until the KYC backlog is clear, major distributions to creditors may be on hold. Thus, due to the massive scope of this bankruptcy, Hall expects that any distribution may not happen until Q4 of 2025. 
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FTX recovers $14.5 million from settlement of 27 small claims

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