FTX creditors across 49 restricted jurisdictions, including major crypto markets like China and Russia, now face the risk of losing claims worth approximately $825 million, according to new updates in the ongoing bankruptcy proceedings.
The latest notice sets a 45-day objection window for affected users to contest the disputed claims. If creditors fail to act within this timeframe, the unresolved claims will be voided and returned to the FTX liquidation trust, which will then redistribute the funds to other eligible claimants.
China’s creditors stand to lose the most — 82% of the disputed claim value originates from China alone. Local legal restrictions are the main hurdle, as the country’s strict ban on cryptocurrency trading conflicts with FTX’s claims payout process.
The risk stems from regional laws prohibiting or severely restricting digital asset trading and distribution. These restrictions have forced the bankrupt crypto exchange to classify related claims as “disputed” under local compliance requirements.
Sunil Kavuri, a vocal advocate for FTX victims, is sounding the alarm on social media platforms like X (formerly Twitter), urging impacted creditors to file objections before the window closes.
“FTX: Restricted countries disputed claims in 49 jurisdictions — only 5% allowed claims, 82% of value in China due to laws prohibiting crypto trading,” Kavuri wrote, emphasizing the dire consequences for those unable to challenge the decision in time.
This development adds fresh urgency to the FTX saga, which has left thousands of global users scrambling to recover billions after the exchange’s dramatic collapse in late 2022.
For now, creditors from China, Russia, and other impacted regions must act swiftly to protect their claim rights or risk being permanently locked out of any future payouts.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are volatile and risky. Always conduct your research before making any investment decisions.
