Chinese Creditors Challenge FTX's Plan to Block Payouts in Certain Jurisdictions
FTX’s proposed plan to restrict creditor payouts in dozens of countries, including China, is facing pushback—most notably from a group of Chinese creditors who argue the move is unjustified and unfair.
Weiwei Ji, a Singapore tax resident holding a Chinese passport, filed a formal objection in Delaware Bankruptcy Court on behalf of more than 300 Chinese FTX creditors. Ji claims FTX is arbitrarily classifying claimants like him under a “restricted jurisdiction” category that could ultimately disqualify them from receiving distributions.
“My family holds four KYC-verified FTX accounts with aggregate claims exceeding $15 million,” Ji stated in his filing. “We have complied fully with the bankruptcy process. The new motion risks stripping away our rights to distribution without cause or justification.”
FTX’s latest motion, submitted by the FTX Recovery Trust, seeks to evaluate creditor claims from 49 jurisdictions that may face legal or regulatory hurdles. These include China, Russia, and Pakistan. If the Trust determines that legal compliance is unachievable in any of these areas, those regions would be labeled as “restricted.” Unless creditors successfully object, claims from these zones could be forfeited and redirected to the Trust for redistribution.
The total claims from these jurisdictions are estimated at around $800 million—with China alone representing roughly 82% of that amount, according to calculations.
Ji challenged the logic behind singling out China, arguing that legal pathways exist to distribute U.S. dollar-denominated claims to Chinese creditors, such as using Hong Kong-based financial institutions. He pointed to the Celsius Network case, where similar concerns were resolved through compliant payout channels.
“Crypto is recognized as legal property in China,” Ji noted, adding that Hong Kong’s crypto regulations further support legal and safe distribution routes. “There is no legal risk in honoring these claims. Denying them would contradict the principles of equity and due process.”
The outcome of this objection could significantly impact how global creditors are treated in FTX’s ongoing bankruptcy proceedings, especially in jurisdictions with complex regulatory landscapes.