FTX, the cryptocurrency exchange that faced insolvency, has decided to extend the deadline for creditors to submit their debt claims, providing them with more time to participate in the ongoing financial proceedings following FTX's collapse.

Initially, creditors were required to file their claims by a specific date, but this deadline has now been postponed to late July or early August. The revised timeline aligns with the voting deadline for creditors to approve a Chapter 11 reorganization plan in the United States, allowing stakeholders additional weeks to prepare and lodge their claims under the Bahamas liquidation process, which operates independently alongside the U.S. proceedings.

Customers of FTX International, also known as FTX, are presented with the option to engage in either the Bahamas or U.S. process, with a clear directive that participation in both processes is not permissible. Further details on the implications of choosing between the two processes will be provided in forthcoming disclosures expected to be distributed in June, giving customers a window of six to eight weeks to make their final decisions.

The decision to extend the debt submission deadline has elicited varied responses within the crypto community. While some view it as a positive step towards addressing the aftermath of FTX's collapse, there is a notable level of discontent among creditors due to uncertainties surrounding the distribution process and concerns about potential delays in receiving payments.

Sunil, a prominent creditor, has raised significant concerns regarding the strategies proposed by Sullivan and Cromwell (S&C), the legal representatives of the debtors, alleging that their actions may have led to damages exceeding $10 billion for FTX creditors. Additionally, the founder of FTX, Sam Bankman-Fried, is reportedly facing challenging circumstances, including being incarcerated.

In a departure from conventional bankruptcy proceedings, FTX intends to allocate substantial cash reserves towards paying interest to its approximately 2 million customers after liquidating all assets. With an estimated $16.3 billion in cash reserves available for distribution and total outstanding debts of around $11 billion owed to customers and other non-governmental creditors, FTX's restructuring efforts are poised to have significant implications for all parties involved.