FTX Recovery Trust has proposed measures that could halt payouts for creditors from 49 countries including China and Russia. This could impact thousands of individuals.
FTX Locks Claims in ‘Restricted’ Regions
FTX Recovery Trust has submitted a new proposal that may stop creditor payouts in 49 countries, including China, Russia, Ukraine, Pakistan, and Saudi Arabia.
If approved, the Trust will freeze distributions in these regions while it checks if payouts are legally permitted. If they are not, creditors may lose their claims entirely.
China Hit the Hardest
Of all the affected countries, China is the hardest hit. According to the filing, 82% of the claim value from restricted regions is tied to Chinese creditors.
This has already sparked backlash online. One Chinese user on X, @zhetengji, stated: *“I will definitely take action and will raise objections at every stage. We can’t just sit and wait - this is absolutely unreasonable.”*
Claims Could Be Forfeited if No Objection Is Filed
Here’s how it works: If legal checks show that payouts can’t happen, the Trust will ask the court to mark that country as restricted. Creditors will have 45 days to object.
If no one objects, or if the court overrules the objections, the claims are marked as disputed and the money goes back to the FTX estate.
> *“Distributions that cannot be made due to the illegality of doing so... shall revest in the FTX Recovery Trust,” the filing states.*
The issues with FTX payouts underscore the complexity of recovery after the company's collapse. For thousands of creditors in restricted regions, the risk of losing their chance for recovery is real.
