FTX Recovery Trust continues its efforts to return funds to creditors while facing legal complexities across various jurisdictions.
Identification of Restricted Jurisdictions
The FTX Recovery Trust has identified 49 countries, including China, Russia, and Ukraine, where local laws and geopolitical realities pose challenges for distributing funds. This group represents only 5% of the total claims amounting to $16 billion, but 82% of this slice comes from claimants in China.
Proposed Procedures for Restricted Jurisdictions
In a recent court filing, the Trust outlined a multi-step plan to address this legal issue. It plans to hire local attorneys to assess the legality of distribution. If local compliance is possible, the Trust intends to proceed with distributions through licensed service providers.
Future for Creditors in Restricted Regions
The FTX Recovery Trust stated that these restrictions are not permanent and that it is working to reduce the number of countries on the restricted list. However, some creditors have expressed frustration, feeling excluded due to geopolitical factors. The court is scheduled to review the motion on July 22, and its approval could enable the Trust to move forward with fund recovery.
The situation surrounding the FTX collapse remains complex. If the proposed procedures are approved, many creditors may find themselves without access to funds for an extended period, while others may successfully receive lawful distributions.
