FTX is seeking court approval to implement a limited processing procedure in 49 restricted areas, including China.
The implementation of this process aims to ensure that the distribution of compensation complies with legal regulations in restricted areas; otherwise, creditors there will lose the right to receive asset distribution. The China area accounts for up to 82% of the value of restricted claims.
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FTX proposed a limited processing procedure in 49 legal jurisdictions, including China.
About 5% of the total claim value is affected, with China accounting for the majority.
The new process will determine the ability to repay or lose the right to receive distribution in restricted areas.
What is FTX seeking approval for in the limited processing procedure?
Representatives of FTX creditors stated that this court permission aims to ensure legal compliance in restricted areas, helping to distribute appropriate compensation or apply limited processing if distribution cannot be executed.
The FTX legal team is carefully reviewing enforcement steps to ensure protection of creditors' rights within the legal framework. The new process will apply to 49 areas where laws or specific regulations restrict asset distribution from the bankruptcy.
How does the specific situation in China affect creditors?
In China, compensation claims account for up to 82% of the total value of 5% of restricted claims. This significantly affects the determination of rights and the ability to receive distribution for Chinese creditors.
Due to strict legal regulations and monetary control policies in China, distributing assets to creditors here faces many difficulties, leading to the possibility of applying a limited processing procedure to comply with local laws.
Implementing a limited processing procedure for areas with specific regulations is a necessary step to ensure FTX can legally fulfill its obligations to creditors while minimizing legal risks for the bankruptcy manager.
Mr. Sunil, representative of FTX creditors, July 2024
How will the limited processing procedure affect the rights of creditors?
If the law permits distribution in restricted areas, creditors will receive full compensation. In cases where distribution cannot be made, creditors in that area will lose the right to receive asset distribution.
This method helps bankruptcy managers avoid violating the laws of countries while being transparent in handling compensation claims from areas with restrictive policies.
Who is responsible and involved in this legal process?
The creditor representative team and FTX's legal team are closely coordinating with the court and related agencies to request permission and implement the limited processing procedure.
This requires high expertise in international law and skills in handling complex bankruptcy cases across various jurisdictions to optimize creditors' rights within permitted limits.
Is there a summary table of the impact of the limited processing procedure in the areas?
Area Claim Value Ratio Main Impact China 82% Loses right to distribution if not legally permitted Other areas in the 49 restricted regions 18% Limited distribution or loss of right to receive distribution
Frequently Asked Questions
What is the limited processing procedure of FTX?
It is a mechanism proposed by FTX to ensure compliance with local laws when distributing assets in restricted areas.
Why does China account for a large portion of the restricted claim value?
Due to strict regulations on cross-border money transfers and tight control over cryptocurrency assets in China.
Do creditors completely lose the right to receive distribution?
Rights are only lost if the court does not permit distribution due to local regulations.
Who decides on the application of this process?
The court is responsible for approving, and the creditor representatives along with FTX's legal team will act according to the approval.
When did this process come into effect?
FTX filed for approval in July 2024 and is awaiting the court's decision.
Source: https://tintucbitcoin.com/ftx-de-nghi-xu-ly-han-che-49-khu/
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