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Ask HN: Is it worth submitting a claim for FTX holdings?
My son had $51K worth of crypto with FTX. On the 9th November he instructed them to sell the coins and obviously received no payment. He just received an email from Kroll Restructuring Administrators showing an amount to his credit of something like $3.00.
Are there any other HN readers in similar positions? How can one submit a claim under these circumstances?
He is absolutely devastated as this was his only savings and he has been unemployed for the last 12 months. I would appreciate any help and suggestions.
- babyshake 4y agoThere needs to be class action lawsuits. Funds need to be clawed back from VCs and insiders.
- wmf 4y agoDefinitely file a claim because there should be more money available later.
- JumpCrisscross 4y agoSubmit a claim. But keep expectations low, i.e. don’t retain counsel. Much of the money is gone. And that which can be recovered will be heavily impaired by legal costs and any senior claims. Sorry for his experience.
- daveidol 4y agoJust gonna say this again “not your keys, not your crypto”
- cypherpunks01 4y agoTrue, but couldn't you also buy stocks and ETFs on FTX at one point?
- JumpCrisscross 4y agoNot sure gambling, but differently, is the right life lesson here.
- aprao 4y agoFile a claim, there is absolutely no downside to doing so.
- xupybd 4y agoI don't want to discourage your son but this might set him up for life. Learning not to invest all your savings in high risk investments is a good life lesson. An invaluable one if you ask me. Learning how to hold on to my money took me way too long.
- ddorian43 4y agoHe'll just burn out and never invest at all like many people did after dotcom bubble.
- JumpCrisscross 4y ago> just burn out and never invest at all like many people did after dotcom bubble Or be frugal and thoughtful as folks did after the Great Depression.
- bluquark 4y agoMuch of the Great Depression generation interpreted that as "only invest in bonds and CDs" and missed out on even larger gains. The stock market did very well the whole 20th century for every retirement generation, if they held lifelong. This historical sequence of stock investors underperforming wildly in the early 1930s, followed by bond investors underperforming wildly in the 1940s-60s boom, is why the 60% stock/40% bond portfolio became the standard advice for cautious savers.
- seattle_spring 4y agoand then end up like my grandma, living her entire life eating spiceless boiled chicken, arguing with clerks over which coupons go together to make things free, and having a garage full of jars labeled with things like “bits of rubber”. Extreme frugality is not exactly a good life.
- ddorian43 4y agoThat looks like consequence of extreme poverty and can probably only be fixed with psychotherapy.
- notch898b 4y agoThese kind of testimonies really drive home what Sam did. Best of luck in your pursuits.
- linuxftw 4y agoDepends on the coins. If he was holding the worthless FTX tokens, he's been totally swindled. This would need to be litigated as fraud (eg, FTX swindled your son out of money for worthless tokens due to their manipulation) rather than a claim on unreturned cash/other types of coins. I suppose if the trade executed and they credited his account with the proceeds and he just wasn't able to withdrawal, he might get something from a claim.
- mjthrowaway1 4y agoMy claim in mtgox was worth ~$2000. I almost didn’t file because I was busy running a growing business. Today it is worth 150k. File the claim. You never know what it ends up being.
- koolba 4y agoDidn’t they value the claims with the BTC value at the time? i.e. it’d still be $2K?
- wmf 4y agoNo.
- mjthrowaway1 4y agoClaim at the time of BK: 50 coins @ $100/ea. Was told that mtgox only had a small fraction of deposits left and there were non-depositor creditors suing. 10 years later and there’s ~20% deposit payouts happening in btc. That’s roughly the situation. The trustee sold some of the coins so some will be cash. Maybe whatever coins they recover increases in value substantially and creditors can be made ‘whole’ like with mtgox?
- sidewndr46 4y agoCan I ask if you got anything back? My understanding was the trustee basically found everything, but never actually remitted settlements to account holders.
- mjthrowaway1 4y agoIt’s a multi-billion dollar BK so they take a while to resolve. Payout amounts have been finalized and the deadline to provide your information is this week. I’m expecting a payment by EOY 2024.
- cypherpunks01 4y agoYes you absolutely want to make sure the claim is correct and settled! Unfortunately the majority of the value was destroyed, but there will be a recovery, that could ultimately be more than 25c on the dollar if you look at the current market pricing, but many unknowns make any real estimation impossible right now. Leaving an incorrect claim would turn that into $0. Kroll makes a ton of errors, and the massive forensic accounting that has gone into rebuilding the debtors' books I'm sure is imperfect as well. TODOs: - Gather up all evidence and history relating to the account that can be found. Ideally FTX screenshots or statements, but barring that, any confirmations of USD and/or crypto deposits, withdrawals, trades, and other activity, in all formats, email confirmations, bank statements, crypto transaction histories, etc. to help serve as proof of the claim. You will need to redact any sensitive information, as the proof of claim is generally made public. - Keep up with the UCC, they primarily post on Twitter - https://twitter.com/FTX_Committee/status/1641569407007707137 https://twitter.com/FTX_Committee/status/1641569407007707137 says "If you believe you have a net positive account balance on FTX’s exchanges and have not yet received your unique Customer Code from FTX’s claims agent, Kroll, please email FTXInfo@ra.kroll.com." - Emailing this address may be worth a try, but Kroll is difficult to work with, so likely won't help much because I'm sure they have a massive number of inquiries. The UCC also keeps some information at https://dm.epiq11.com/case/ftx/info2 https://dm.epiq11.com/case/ftx/info2 - Work on the proof of claim. There is no huge rush as the bar date has not even been set yet, so make sure you can gather up as much info as possible and fill out the claim form as accurately as possible. Submit it with redacted evidence gathered up. Make sure you get confirmation of receipt. Once you get the claim issue resolved, one possible outcome to consider if cash is needed before waiting years for the case to settle, is to sell the claim on a reputable market like Xclaim. (Current pricing "up to" 19c, I'm sure it'd be lower for a $50k claim)
- cypherpunks01 4y agoSince this was upvoted I would add that, while you navigate bankruptcy procedures and other practical matters in recovery of this claim, do keep in mind that the ultimately more important (and difficult) matter to navigate is helping with recovery of self-worth and career after a very painful financial loss. That will prove a lot more valuable in the long run.
- aabhay 4y agoI'd be more concerned with helping him out of his unemployment than helping him submit a claim for these funds. A job can bring happiness, fulfillment, and a sense of purpose. I'm doubtful this claim on 50K can achieve that.
- eaurouge 4y agoWhat do you mean when you say he instructed them to sell his coins? On the 9th, he could still log into his account. And I don't believe FTX staff were taking phone instructions to buy/sell tokens on behalf of customers. You need answers to, and ideally proof of, the following: - token holdings and USD balance before any transactions on the 9th - token holdings and USD balance after the 9th I've seen Twitter posts reporting inaccurate claim balances. And I'm not sure a determination has been made yet on how tokens will be valued. That is, USD value at time of bankruptcy vs USD value at some court appointed date. Find a community of FTX claimants, possibly on Twitter or similar, so you can stay up to date on the process. Say he had a $51K portfolio of FTT tokens on the 9th, present value is ~$3K (https://www.coingecko.com/en/coins/ftx-token https://www.coingecko.com/en/coins/ftx-token). Higher if he held BTC or ETH. So first step is to get a clearer picture of what was held. Then he can elect to submit a claim and wait for the process to play out, or he can try to sell his claim to a third party.
- charliea0 4y agoYes. It takes years but recovery can be higher than expected. Some Madoff victims ultimately got back something like 80%. I wouldn’t have high expectations, but it’s probably worth preserving documentation and making sure your claim is considered.
- davidkuennen 4y agoThat's heartbreaking. I feel for your son. You should file a claim, but keep expectations low.
- collectedparts 4y agoIf you're talking about FTX US, and your son instructed them to sell coins, if the trade was executed he may have been credited to his USD balance. If so, these funds would be validly held in his name by Evolve Bank & Trust. You should review: https://www.getevolved.com/important-information/ https://www.getevolved.com/important-information/ > What should FTX customers know about their accounts? > Evolve understands there is confusion about the status of these accounts. Please know your funds are safe and secure. By law, Evolve is holding onto these balances until the court overseeing the FTX bankruptcy allows us to release these funds. > Evolve will work with each individual accountholder to ensure accuracy and timely return of the account balances. We urge FTX customers to contact us at support-ftx@getevolved.com for more information. Evolve is a real bank (outlasted SVB/Silvergate/Signature/[Credit Suisse?]). I'd have to imagine their support is still overloaded, but worth an email nonetheless. Even if so, I'd caution not to get hopes up too high, because I could imagine some sort of clawback occurring for trades that executed just before trading stopped.