The FTX Recovery Trust has taken a crucial step towards addressing international creditor claims tied to the collapsed crypto exchange. On July 3, the Trust filed a motion in court seeking approval to initiate a new process for handling previously ineligible creditor claims.
FTX Assesses Distribution Challenges in 49 Countries
The FTX Trust has identified 49 foreign countries that may pose legal obstacles to distributing creditor funds. These jurisdictions include major nations such as China, Russia, Ukraine, Pakistan, and Saudi Arabia.
Although claims from these regions account for only 5% of the total estimated $16 billion, they are significant, with about 82% of that portion coming from claimants based in China.
FTX Trust Outlines Plan for Payouts in Legally Challenging Countries
To address this, the Trust has proposed a detailed process it calls the Restricted Jurisdiction Procedures. This plan involves hiring legal experts in each country to examine whether it is possible to make distributions while complying with local laws and regulations.
If the legal review confirms that distributions can proceed in a particular country, the Trust will go ahead and work with service providers to deliver the funds. However, if legal compliance cannot be ensured, the Trust will notify creditors in that country and request that the court officially classify the region as restricted.
Creditor Reactions and Previous Steps
Some creditors, especially those in China, have already expressed strong concerns about the proposed plan, calling it unfair and urging others to speak up. The FTX Recovery Trust began its second round of creditor payments in May.
Earlier, it tried to reach more people by adding Payoneer as a third payment partner, now covering 93 regions. However, despite this step, some users remain left out due to the complex legal environments in their respective countries. The Trust continues to focus on finding lawful and fair solutions to return funds to creditors.
The FTX Recovery Trust is actively working on addressing creditor claims, aiming to create legal mechanisms for payouts despite existing legal barriers and varied opinions among creditors.
