The FTX repayment dispute is growing more complex: over 300 Chinese creditors oppose the suspension of distributions.
A creditor of Chinese nationality has formally objected to a motion filed by FTX’s estate seeking to halt repayments to residents in jurisdictions with restrictive cryptocurrency regulations, according to documents submitted to the court on July 8.
The creditor, Weiwei Ji, although residing in Singapore, was classified as a Chinese creditor due to holding a Chinese passport. Ji specified that the objection was filed on behalf of himself and a growing group of Chinese creditors, reportedly numbering over 300 individuals.
The opposition is based on two main arguments: first, that FTX payments are made in U.S. dollars, which constitute a legally recognized means of repayment. Secondly, it stresses that cryptocurrency distributions are legal in China, where digital assets are considered “personal property.”
“My family holds four KYC-verified accounts with aggregate claims exceeding $15 million USD… We have fully complied with every procedural requirement under the Plan. The proposed motion now jeopardizes our right to distribution in an arbitrary and inequitable manner,” Ji argues in the document.
FTX estate’s motion on repayments
FTX’s estate had submitted a motion to suspend payments to residents of restricted countries, arguing that “distributions made by or on behalf of the FTX Recovery Trust in jurisdictions in violation of these legal restrictions could trigger fines and penalties, including personal liability for directors and officers, and/or criminal sanctions up to imprisonment.”
The motion identified 49 countries with unclear or restrictive crypto regulations — jurisdictions that could pose potential legal and cross-border complications. Claims from these 49 regions total around $800 million, with China accounting for 82% of the value in potentially restricted areas.
The filing was made before the U.S. Bankruptcy Court in Delaware. According to the motion, about 5% of the value of admitted claims belongs to residents of these restricted jurisdictions.
In addition to China, countries potentially subject to restrictions include Russia, Egypt, Afghanistan, Tunisia, Zimbabwe, Ukraine, and Moldova.
FTX’s estate cited Moldova as a specific example in its motion:
“In Moldova, it is a criminal offense to engage in the activity of providing services regarding virtual assets … on the territory of the Republic of Moldova, including in cases where this activity is auxiliary/supplementary to the main activity.”
