Creditors of the FTX exchange, including those from China, oppose a proposal to restrict payouts in areas where cryptocurrency is banned.
Creditor Objection
On July 8, 2025, FTX creditor Weiwei Ji filed an objection in the Delaware Bankruptcy Court, representing 300 other creditors. The central issue of the filing is the proposal to restrict payouts to users in 49 jurisdictions, where cryptocurrency is banned or has unclear status under local law. Among these jurisdictions is China, which accounts for over 80% of the affected claim value.
Legal Status of Crypto in China
Ji, a Chinese passport holder and tax resident of Singapore, argued that including China on the list is inaccurate and legally unsupported. He stated that distributing funds to users in this region carries no regulatory or criminal implications. According to him, FTX claims are denominated and settled in U.S. dollars, not cryptocurrency, and can be lawfully received by Chinese residents through standard channels, including wire transfers via accounts based in Hong Kong.
Discussion and Next Steps
Ji also emphasized that although retail trading of cryptocurrency may be restricted, crypto ownership remains legal in the country. Judicial rulings, including a 2024 ruling by a Shanghai Court, affirm the recognition of digital assets as personal property. He cites precedents such as the Celsius bankruptcy, where Chinese users were paid in USD, and the Mt. Gox rehabilitation, where Chinese creditors successfully received crypto payouts. A review of FTX's motion is ongoing, with a court hearing scheduled for July 22.
The conflict surrounding the distribution of FTX funds raises important questions about the legal status of cryptocurrencies and the fairness of payouts to creditors in various jurisdictions.
