FTX Halted Withdrawals | November 2022
Total claims paid
A total of $4,924,887.90 was paid out for Claims 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 176, 178, V2 12, V2 14, V2 19, and V2 20.
Overview
After FTX halted withdrawals in November 2022, members who held FTX Custody Cover at the time withdrawals were first halted waited for the 90-day period to pass. Section 1.2 of the Custody Cover wording provides protection for assets that cannot be withdrawn from a centralized exchange after more than 90 days has passed.
During this time, members documented their losses and prepared for claims filing. Before the 90-day period ended, a guide to FTX claims filing was shared across the Mutual's social channels.
After 90 days passed, withdrawals were still halted on FTX. On Monday, 6 February 2023, members began filing claims for the FTX loss event. As claims were filed, members staked NXM to participate in the Claims Assessment process. Claim assessors discussed claims in the Nexus Mutual Discord and kept track of eligible covers in the FTX Claims Tracker.
Filed claims and outcomes
Twenty-four (24) claims were filed, and those claims were reviewed and voted on by claim assessors. Since this loss event met the terms outlined in Section 1.2 of the Custody Cover wording, claim assessors reviewed the validity of the claims to determine:
- Was the member's FTX Custody Cover active at the time withdrawals were first halted?
- Did the member provide off-chain proof of loss with their claim?
- Did the member verify ownership of their FTX account?
For more information on each claim, review the sections below and the Nexus Mutual Claims Dune dashboard.
Approved claims
Claim assessors reviewed and approved Claims 156, 157, 158, 159, 160, 161, 162, 163, 164, 165, 166, 167, 168, 169, 170, 171, 172, 173, 176, 178, V2 12, V2 14, V2 19, and V2 20. These claims included proof of loss, which showed each affected member suffered a loss due to halted withdrawals.
You can review a summary of each claim in the Nexus Mutual Claims History database and the Nexus Mutual user interface.
Denied claims
Claim assessors reviewed and denied Claims 146, 148, and 175.
Claim 146 was filed before the 90-day period had passed, and this cover expired on 13 October 2022. Because the cover expired before withdrawals were halted and it was filed before withdrawals had been halted for more than 90 days, claim assessors voted to deny this claim.
Claim 148 was filed before the 90-day period had passed, and claim assessors voted to deny this claim for that reason. The member who filed this claim waited until the 90-day period passed and filed a second claim (Claim 158), which claim assessors approved and paid.
Claim 175 was filed with a requested claim amount that was higher than the actual loss amount. Because the requested claim amount was higher than the actual loss, claim assessors voted to deny this claim. The member who filed this claim submitted a second claim, where the requested claim amount matched the actual loss. After reviewing this second submission, claim assessors voted to approve and pay this claim.
FTX bankruptcy and reimbursement
Members who filed a claim and received a payout agreed to the following terms:
By making a successful claim and receiving a payout (i.e., reimbursement) from Nexus Mutual, you agree to give rights to any future reimbursements from the FTX bankruptcy proceedings — including any future reimbursement tokens distributed as part of the FTX bankruptcy settlement — to Nexus Mutual, per the recoveries provision in Section 3 in the Custody Cover wording: https://nexusmutual.io/pages/CustodyCoverWordingv1.0.pdf.
The DAO Community team and the Foundation Legal team is in the process of working with members who received claim payouts to transfer the bankruptcy claims to the Mutual, so any future reimbursement can be returned to the Capital Pool.