Thousands of FTX users hoping for reimbursement now find themselves in a legal gray area. FTX Recovery Trust has announced the suspension of payouts to creditors in 49 jurisdictions where cryptocurrency activity is restricted or outright banned.

According to a court filing dated July 2, affected countries include China, Nigeria, Fiji, Andorra, and Zimbabwe. While only 5% of approved claims come from these regions, a staggering 82% of the frozen funds originate from China alone.

🔒 “Hold and Review” – FTX Plays It Safe

The company has implemented a "Hold and Review" process that automatically marks claims from these countries as "disputed." Payouts will only be released if legal counsel confirms they don’t violate local laws. Affected creditors will receive a “Restricted Jurisdiction Notice” explaining the reasons for the block and giving them at least 45 days to file an objection.

However, the move has sparked criticism – particularly from users who have since moved to crypto-friendly countries yet remain unable to access their claims.

https://x.com/sunil_trades/status/1940763118998630415

A Chinese creditor using the handle Will的折腾纪 (@zhetengji) revealed he is launching legal action against FTX. He argues that the freeze is unjustified, as Chinese law does not prohibit holding crypto or USD assets abroad. Since FTX pays out claims in U.S. dollars, he questions why bank transfers are not allowed. He urges other affected users to join him in challenging the decision.

📉 Disputed Claims Shrink – But Billions Still Frozen

FTX also provided a positive update: the total value of disputed claims has dropped from $6.5 billion to $4.6 billion. About $1.8 billion in previously disputed claims have been approved, with another $2.7 billion expected to be greenlit soon.

Still, the uncertainty remains: until legal clarity is reached in all affected jurisdictions, billions of dollars will remain in limbo – leaving thousands of creditors waiting.



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