Expunged claim or forfeited distribution: what is the difference?
| Expunged claim | Forfeited distribution | |
|---|---|---|
| What is lost | The whole claim | Tax form: one payment. Step 8: potentially the right to receive distributions on the claim |
| Usual reason | KYC not started, not finished or rejected | Tax form (Step 7) or provider onboarding (Step 8) not done in time |
| Who decides | The court, by order on the Trust’s objection | The plan’s rules, applied by FTX after each record date |
| Future rounds | None unless the court reinstates the claim | Tax-form forfeiture: possible once requirements are met. Step 8: do not assume future rounds remain available |
| Can it be fixed? | Only by a court order; so far the court has refused late KYC | A lost payment generally cannot be recovered. Complete missing steps and confirm whether distribution rights remain |
Check which one applies to you before doing anything else.
- In the portal: the claim status is in Step 5, and the distribution status is on the Distributions Dashboard.
- On the docket: an expunged claim also appears on an exhibit to a court order or notice.
Which FTX KYC deadlines have passed?
| Deadline | What it required | What happened | Source |
|---|---|---|---|
| 29 September 2023 | Customer proof-of-claim bar date | Customers filed or relied on their scheduled claim | The Trust’s filing, D.I. 36001 |
| 1 March 2025, 4:00 p.m. ET | Start KYC | More than 390,000 claims expunged | KYC order D.I. 29464; notice D.I. 30042 (2 April 2025) |
| 1 June 2025, 4:00 p.m. ET | Submit all requested KYC information | More than 47,600 claims expunged | Notice D.I. 31139 (2 July 2025) |
| 30 June 2026, 4:00 p.m. ET | Final KYC deadline for claims on the Trust’s 200th omnibus objection | Claims that missed it were expunged | Order D.I. 35557 (11 May 2026); notice D.I. 36065 (31 July 2026) |
FTX’s status page lists the 2025 dates as 3 March and 2 June, the next business days. Either way, all of these deadlines have passed.
What the court has ruled on late KYC
One creditor whose claim was expunged for missing the June 2025 deadline asked the court to accept KYC after the deadline.
- The original request. The court refused it in a bench ruling on 24 November 2025.
- Reconsideration. The creditor then asked the court to reconsider, citing new evidence. The Trust objected, saying the deadlines were set by court order and applied to everyone.
- The final order. On 19 August 2026 the court denied the request (order D.I. 36161).
What this means: if your claim was expunged for missing a KYC deadline, completing KYC now does not bring it back. The order disallowed the claim itself.
- The only route is a court motion, for example under section 502(j) of the Bankruptcy Code and Bankruptcy Rule 3008, which allow a disallowed claim to be reconsidered for cause.
- It needs a lawyer and new, specific facts, and the court has so far held to its deadlines.
The Trust’s filings also show what KYC was rejected for. Its vendor, Sumsub, told claimants that “screenshots, photos of document copies, and images altered in photo redactors are not acceptable”.
KYC rejected: name mismatches and the September 2026 objection
On 1 September 2026 the Trust filed its 203rd omnibus objection (D.I. 36197) to 616 customer claims, worth about $4.5 million in total. They fall into four groups:
- Verification failure (488 claims): the KYC information did not match the records of the original account holder, and the claimant did not resolve the difference. This is where name mismatches end up.
- Security questionnaire failure (116): the claimant failed the questions about the account.
- Source of funds (10): the claimant refused to provide source-of-funds documents.
- KYC withdrawn (2).
Deadlines: responses were due by 2 October 2026, and the hearing was on 20 October 2026. The claims listed in the order were disallowed and expunged by order of 21 October 2026 (D.I. 36747).
If your KYC shows as rejected but your claim is not on any objection:
- Read the reason in the portal.
- Answer the KYC request through the official upload route.
- Use documents in the name of the original account holder. The name, date of birth and address must match the FTX account.
Forfeited distributions: section 7.14 and the six-month rule
Section 7.14 (tax form and other certifications). Section 7.14 of the FTX plan requires every holder, on request, to provide a tax form and other certifications before a distribution.
- If the first request is not met within 30 days, FTX sends a second one.
- If that is not met within 60 days, the holder “shall be deemed to have forfeited its right to receive Distributions”.
- Forfeited amounts go back to the estate as plan assets.
- FTX applies this after each record date: the tax form (Step 7) must be in within 90 days of FTX’s first notice, or that round’s payment is forfeited.
The six-month rule (Step 8). FTX’s Distributions Dashboard FAQ says that a holder who does not onboard with a distribution provider within six months of a distribution date may forfeit their right to receive distributions on that claim. This is broader than losing only one payment; do not assume later rounds are protected.
- For the 31 July 2026 round, six months is about 31 January 2027. See the Step 8 onboarding deadline.
- If your country is restricted, see our list of restricted jurisdictions.
What you can do:
- Complete the missing step now. Completing Step 7 and Step 8 before the next record date is necessary for payment, but does not restore rights already forfeited or guarantee inclusion. See our next-distribution estimate.
- If you believe you met the deadline, gather the evidence (emails, portal screenshots, the provider’s confirmation) and raise it in writing with FTX support. The portal shows the outcome, not the reason, and errors can be corrected.
- Do not expect a lost payment back if the step was in fact missed. For Step 8, ask FTX to confirm the effect on your remaining distribution rights.
Who still has options
| Your situation | Status | What you can do | Can you sell the claim? |
|---|---|---|---|
| KYC passed, claim allowed, Step 7 or Step 8 not done | Payment pending; distribution rights may be at risk | Finish Step 7 and Step 8; Step 8 for the July 2026 round by about 31 January 2027 | Yes, subject to review of remaining rights |
| KYC passed, claim allowed, one past payment shown as forfeited | Confirm remaining distribution rights | Complete the missing step; challenge only with evidence; distinguish tax-form forfeiture from Step 8 | Yes, if future distribution rights remain |
| KYC rejected, claim not on an objection | At risk | Answer the KYC request with documents of the original account holder | Paxtibi can consider buying before KYC passes; FTX still requires the original holder to pass KYC before paying the transferred claim |
| KYC rejected, claim on the September 2026 objection | Disallowed by order of 21 October 2026 (D.I. 36747), if listed in the order | Check the order and its schedules; reinstatement requires a court motion | Generally no, unless the court reinstates the claim |
| KYC not started by March 2025, not finished by June 2025, or missed 30 June 2026 | Expunged | Only a court motion; the court has so far refused late KYC | Generally no, unless the court reinstates the claim |
| Country restricted at Step 8 | Payment deferred; six-month rule still matters | Move only if you really live elsewhere, sell, or ask about payment processing | Yes, subject to claim status and remaining distribution rights |
For a sale, see how to sell your FTX claim and sell your FTX claim. You can check scheduled balances with the FTX claim calculator. For a missing payment, see our Step 8 checklist. More answers are in the FTX FAQ.
What not to do
- Do not pay anyone who promises to “restore” an expunged claim or “unlock” KYC for a fee. Restoring a claim takes a court order.
- Do not send your portal login, seed phrase or ID documents to anyone except FTX’s official channels and their KYC vendor.
- Do not use someone else’s documents to pass KYC on an account. A mismatch is the most common reason for rejection, and the Trust objects to such claims.
Our take
Most of the damage was done by the 2025 deadlines, and the court has held to them in the cases discussed here. If your claim was expunged, be realistic: reinstatement requires a court order and advice on the specific facts. If your claim is allowed, a missing Step 8 for the July 2026 round may put the right to receive distributions on the claim at risk after about 31 January 2027. Check the portal this month.
FAQ
Can I still complete FTX KYC in 2026?
For most claims, no. The court’s deadlines were 1 March 2025 to start KYC and 1 June 2025 to finish, and the final deadline for a group of unverified claims passed on 30 June 2026. If your claim is still allowed and FTX asks for KYC information, answer it through the official upload route.
My FTX claim was expunged for KYC. Can I get it back?
Only by a court order, and so far the court has refused. On 19 August 2026 it denied a creditor’s request to reconsider a refusal of late KYC. A motion to reconsider a disallowed claim needs a lawyer and new, specific facts.
What does “forfeited” mean in the FTX portal?
A distribution forfeited for missing the tax-form deadline (Step 7) is one lost payment; the claim itself remains. Step 8 is different: FTX says missing provider onboarding within six months may forfeit the right to receive distributions on the claim. Check the notice and confirm your remaining rights with FTX rather than assuming later rounds can still be paid.
Why was my FTX KYC rejected?
The most common reason in the Trust’s filings is that the KYC information did not match the records of the original account holder. Other reasons are a failed security questionnaire, refusing source-of-funds documents, or unacceptable images such as screenshots.
Can I sell an FTX claim with failed KYC or a forfeited distribution?
Paxtibi can consider buying a claim before KYC passes, as well as an allowed claim with a past forfeited payment, subject to review of its status and remaining distribution rights. Buying does not remove FTX’s requirement that the original holder pass KYC before FTX pays a transferred claim. Paxtibi generally cannot buy an expunged claim unless a court reinstates it.
Sources
- FTX plan (D.I. 26404-1), section 7.14, as served in D.I. 30642 (5 June 2025)
- Order denying reconsideration (D.I. 36161), 19 August 2026
- Trust objection to reconsideration (D.I. 36001), 16 July 2026; includes KYC order and notices
- Hearing agenda (D.I. 36153), 19 August 2026
- 203rd omnibus objection to rejected KYC (D.I. 36197), 1 September 2026
- Expungement notice (D.I. 36065), 31 July 2026
- FTX: Distributions Dashboard FAQs
- FTX: KYC Statuses Explained
- DL News: FTX to toss out over $2.5bn in claims tied to KYC failures, 5 April 2025
- Order sustaining the 203rd objection (D.I. 36747), 21 October 2026 (court-record mirror)
Disclaimer: this article is for information only and is not legal, tax or financial advice. Paxtibi buys bankruptcy claims and offers payment processing, so we have a commercial interest in this topic.