FTX Bankruptcy Hearing Is Down to One Last Fight

Miss a form, lose your money. That is the lesson of the FTX bankruptcy, and it drives the only dispute set for August 19.

A court agenda filed Monday leaves one customer motion before Chief Judge Karen B. Owens. Claimant Daizhuo Chen wants a second chance at a verification deadline he missed.

What Is Left on the FTX Bankruptcy Docket

Chen filed his motion on March 27. He asks Owens to undo her refusal to let him finish his checks late.

He cites Federal Rules of Civil Procedure 59(e) and 60(b)(2). Those rules let a judge reopen a decision when fresh evidence appears. Owens has not said any exists here.

The timeline is tight and well documented. FTX told customers to begin verification by March 1, 2025, and to finish by June 1, 2025. Both deadlines closed at 4 p.m. ET.

The FTX Recovery Trust, the entity now winding down the estate, objected again on July 16. It has fought similar requests before.

Chen is not alone. D1 Ventures has chased $251,000 in USDC and USDT since December 2022. The Trust says that account never cleared verification either.

That motion was adjourned again with no new date. Two other suits were also pushed back, so both stay open.

Ernst & Young filed a final fee application. Counsel will submit orders without argument, another sign the estate is closing out.

Why a Missed KYC Deadline Can Cost a Creditor Everything

Verification is the gate to payment. Claimants must clear know your customer (KYC) checks, file tax forms, and onboard with BitGo, Kraken or Payoneer.

Skip any step and the money moves on without you. The Trust has said hundreds of thousands of customer claims were already thrown out for failing these checks.

The gap between the two groups is stark. Creditors who finished the paperwork have recovered their full claims, and several classes got more.

• Convenience claims, 120% recovered
• U.S. customer claims, 100%
• General unsecured claims, 100%
• Dotcom customer claims, 96%

Those totals run through the fourth round of repayments on March 31, which sent out about $2.2 billion. Roughly $900 million followed on July 31 in the smallest FTX distribution so far.

Money is still held back for contested claims. The Trust has asked to cut that reserve by $600 million, from $2.4 billion to $1.8 billion.

So Owens’s reasoning matters well beyond Chen. Anyone still shut out over paperwork will read it for an opening.

Sam Bankman-Fried has no role in any of this. His conviction and 25-year sentence were upheld in June. The appeal mandate issued in August ended his case at the Second Circuit.

The hearing starts at 9:30 a.m. ET on Wednesday by Zoom. Owens is expected to rule from the bench. Her answer will tell every late filer how much room is left.