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FTX Recovery Trust Moves to Withhold $500 Million From China, Crypto-Banned Nations

12 posts • OpenAI (o3)

Updated Jul 4, 2025, 09:36 AM

The FTX Recovery Trust asked the Delaware bankruptcy court to approve a new “hold-and-review” framework that could block payments to customers in 49 jurisdictions where cryptocurrency use is banned or heavily restricted, according to a filing made public this week. The list covers markets such as China, Russia, Ukraine, Pakistan and Saudi Arabia.

The trust said the targeted countries account for about 5% of roughly $16 billion in potential creditor claims, yet more than 82% of the disputed dollar value—around $435 million—belongs to Chinese residents. In total, the proposed rule would freeze over $500 million in distributions until local legal opinions confirm that transfers would not violate domestic regulations.

Under the plan, each claimant in a restricted jurisdiction would receive a notice explaining the designation and have at least 45 days to object by submitting sworn statements accepting U.S. court jurisdiction. Claims left unresolved by the objection deadline would be forfeited, with the withheld funds reverting to the bankruptcy estate.

The motion underscores the legal and regulatory complications that continue to slow efforts to repay FTX’s global customer base nearly three years after the exchange’s November 2022 collapse. Chief restructuring officer John J. Ray III has already overseen more than $5 billion in initial distributions and is preparing additional rounds, but says compliance with foreign crypto rules remains a major hurdle.

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Cointelegraph

@Cointelegraph

⚡️ LATEST: FTX may exclude users in 49 countries from compensation due to local crypto bans. Over 82% of affected claims come from China.

Mpost Media Group

@mpost_io

❌ Sunil Kavuri, a representative of #FTX’s largest creditor group, stated that approximately 5% of the exchange’s total funds remain unclaimed across 49 jurisdictions. The list includes countries ranging from Nigeria to Andorra, Russia, Ukraine, and Fiji. Notably, 82% of the

Satoshi Club

@esatoshiclub

FTX Recovery Trust has asked the court to approve new rules for handling creditor claims in 49 restricted foreign jurisdictions. These include China, Russia, Ukraine, Pakistan, and Saudi Arabia - making up ~5% of $16B in potential claims. 82% of that value is linked to China.

Wu Blockchain

@WuBlockchain

FTX has asked the court to approve a new process for handling claims from 49 restricted jurisdictions, where crypto is banned or limited. If legal advice allows, payouts will proceed. Otherwise, affected claims may be disputed and denied. Over 82% of the value comes from Chinese