FTX Creditor Settlement: User Claims from China and 48 Other Countries May Face Confiscation
FTX applied for court approval to implement 'restricted processing procedures' for 49 countries/regions (including China). Due to disputes over these countries' legal attitudes and supportiveness towards cryptocurrencies, FTX will confiscate creditor shares from those countries and redistribute them to creditors in other countries. These regions account for about 5% of the total debt, with Chinese debt accounting for as much as 82%.
Event Timeline
Court Hearing
Court hearing time: July 22, 2025, 9:30 AM (ET). Creditors can participate in the hearing to express objections. Those who have sold their claims are not affected, while unsold creditors should pay high attention to the risks brought by this application.
Objection Deadline
Creditor objection deadline: July 15, 2025, 4:00 PM (ET). If creditors from mainland China or other restricted countries, their compensation funds are currently in 'disputed status', they will receive notifications and have a 45-day window to submit objections.
FTX Submits 'Restricted Processing Procedure' Application to Court
FTX applied for court approval to implement 'restricted processing procedures' for 49 countries/regions (including China). If legal payment opinions can be obtained from those countries, normal compensation will be made; if unable to obtain, or if lawyers deem payment inappropriate, 'restricted procedures' will be initiated, confiscating creditor shares from those countries.
Chinese Creditors Face Asset Confiscation Risk
If Chinese creditors are designated as 'restricted', they will be unable to receive compensation, and the corresponding compensation funds will be confiscated, returned to the liquidation trust, and redistributed to creditors in other countries. Chinese debt accounts for as much as 82%, with enormous impact scope.
Implementation Reason: Avoiding Legal Risks
Some countries prohibit crypto trading or payments, and paying digital assets may be illegal or considered money laundering. If FTX makes illegal payments, it may face criminal liability, therefore implementing 'restricted processing procedures' to avoid legal risks.