FTX creditors left underwhelmed with Payoneer refund option, key markets remain blocked

Bankrupt crypto exchange FTX has selected the fintech platform Payoneer as one of its distribution agents. The bankruptcy estate disclosed this in a press release, noting that the platform will join as its third distribution agent after BitGo and Kraken. 

According to FTX, Payoneer operates in more than 190 countries globally and will assist the exchange in distributing repayments to retail customers in supported countries in line with its Reorganization Plan.

It said:

“The FTX Recovery Trust (collectively “FTX”) and FTX Digital Markets Ltd. (“FTX DM”) today announced that each has agreed with Payoneer…to assist in distributing recoveries to retail customers in supported jurisdictions.”

Meanwhile, the exchange stated that Payoneer would be available as a distribution provider for customer repayments after May 30, 2025. The exchange has already distributed over $7 billion in two phases, so Payoneer will become an available distribution provider option from the third phase, which has yet to be announced.

Interestingly, the exchange added a caveat that anyone who selected Payoneer as a distribution agent and requested to be onboarded as a customer has effectively forfeited their rights to receive cash distributions from FTX. Instead, they have directed the defunct exchange to pay directly to Payoneer and for Payoneer to pay to their bank accounts.

It also warned users about the risks of phishing, noting that users should ignore any email that appears to be from FTX and avoid websites that look like its claims portal, as the exchange will never require creditors to connect their wallets.

Payoneer selection likely to address restricted countries

Selecting Payoneer appears to be part of the FTX efforts to cater to creditors in restricted countries. While the exchange has had two distribution phases, creditors in countries such as China, Russia, Nigeria, Egypt, India, and others have been ineligible for repayment.

However, Payoneer has now added coverage for some previously restricted countries. According to crypto claims specialist Thomas Braziel, countries such as Indonesia, Japan, and some states in the US, such as New York, Washington, and ME, that BitGo and Kraken restricted are now available.

Nevertheless, Payoneer still left out multiple countries, with only about 90 out of the 190 it supports eligible for the FTX distributions. Major countries such as China, Russia, Ukraine, and Nigeria are still restricted.

It is unclear whether those jurisdictions will eventually become open for distribution. This further compounds the struggles of creditors in those countries that account for a sizable portion of FTX creditors, with China alone having around 8% of the total claims.

Unsurprisingly, the continued exclusion has attracted criticisms from several creditors who believe the bankruptcy administrators are giving US creditors special preference while other users continue to wait for refunds.

More complaints trail FTX’s refund process

Meanwhile, creditors in restricted countries are not the only ones with complaints about the FTX refund process. Even those in jurisdictions that are eligible to get distributions face their issues.

Several customers of FTX Bahamas have complained of the inability to get their refunds. According to FTX creditor champion Sunil Kavuri, creditors are stuck in various stages, including identity verification, payment instructions, or locked claims settlement, sometimes lasting for multiple months.

However, some users reported that they have been paid, showing that the issues are not peculiar to all FTX Bahamas users. Several users are also waiting for their disputed claims to be resolved. Currently, the exchange already has $6.5 billion set aside for disputed claims and is set to allow $3.1 billion of such claims.

Interestingly, some creditors using BitGo to receive funds have also experienced withdrawal delays. Kavuri explained that this is due to BitGo withdrawals’ complexities, including transfers not happening in real-time and the platform not operating on weekends.

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