FTX Recovery Trust is taking steps to settle claims from creditors following the collapse of the crypto exchange. The introduction of restrictions is due to legal concerns over payouts.
Reasons for the Payout Freeze
The FTX Recovery Trust has decided to freeze payouts to creditors from 49 countries, including China and Nigeria, due to concerns that releasing funds might violate local laws. These regions have been designated as 'Potentially Restricted Foreign Jurisdictions' that require detailed legal review before any disbursement can occur.
Creditor Notification Process
The FTX Recovery Trust will implement a hold-and-review system for claims. Once approved by the court, each affected creditor will receive a Restricted Jurisdiction Notice. This notice will outline the reasons for the dispute, list the relevant jurisdiction, and provide an objection deadline of at least 45 days.
Risks for Creditors
The FTX Recovery Trust warns that if a creditor fails to object within the given time frame or loses the court battle, their claim will be automatically forfeited. This means the creditor permanently loses access to their funds. Notice is considered complete once it reaches the last known contact on file.
The FTX Recovery Trust emphasizes the need to protect the estate from risks, even at the cost of delays or losses for creditors in restricted countries.
