FTX, the cryptocurrency exchange that recently faced bankruptcy, has announced an extension to the deadline for creditors to submit their debt claims. The new deadline, now set for late July or early August, aligns with the voting deadline for creditors to approve a Chapter 11 reorganization plan in the United States. This adjustment offers creditors the choice to participate in either the Bahamas liquidation process or the U.S. bankruptcy proceedings, but not both.

Initially, FTX creditors had a specific cutoff date for filing their claims, which has now been postponed to allow more time for creditors to lodge their claims amidst the ongoing financial proceedings following FTX’s collapse. The extension provides stakeholders with additional weeks to prepare and submit their claims under the Bahamas liquidation process, which operates independently from the U.S. proceedings.

Customers of FTX, also known as FTX International, will receive details and implications of choosing between the two processes in upcoming disclosures expected to be sent in June. This will give customers between six to eight weeks from that point to make their final decisions on which process to engage in.

The decision to extend the debt submission deadline has evoked mixed reactions within the crypto community. While some view it as a positive step towards rectifying the aftermath of the company's collapse, there is notable dissatisfaction among creditors due to uncertainties surrounding the distribution process and potential payment delays. Sunil, a prominent creditor, has raised concerns over the proposed plans by Sullivan and Cromwell (S&C), the legal team representing the debtors, amid allegations of damages exceeding $10 billion to FTX creditors.

In an unexpected twist, FTX founder Sam Bankman-Fried is facing serious legal issues, with plans to allocate significant cash reserves towards paying interest to the exchange's approximately 2 million customers after the liquidation of assets. FTX anticipates having around $16.3 billion in cash reserves available for distribution, while the total outstanding debts, estimated at approximately $11 billion, are owed to customers and other non-governmental creditors.