FTX has stopped paying compensation to creditors in 49 countries with restrictions or bans on cryptocurrency activities.
Due to legal requirements and instability within local legal frameworks, the compensation funds are frozen, particularly in China, which accounts for a large portion of the frozen value. The processing of these claims is awaiting a court ruling.
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FTX has frozen compensation payments in 49 countries due to local legal regulations.
China accounts for up to 82% of the value of frozen claims, even though the affected area makes up 5% of the claims.
The total approved claim value has increased to $8.3 billion, reducing the total disputed value from $6.5 billion to $4.6 billion.
Why does FTX have to freeze refunds in restricted areas?
FTX representatives stated that according to local laws in 49 countries, the distribution of cryptocurrency or payments to residents may encounter legal risks if not confirmed beforehand.
This freezing action is to comply with the regulations of each country, avoiding violations of cryptocurrency laws. Among them, China is the hardest-hit area with 82% of the total frozen value despite accounting for only 5% of total claims.
How are disputed claims processed?
FTX has implemented a 'hold and review' system, classifying all claims from restricted areas as 'disputed'. Resolutions can only be made when legal counsel confirms compliance with local laws.
When the court approves, each affected creditor will receive detailed notification regarding the reasons and have at least 45 days to contest.
“We need to ensure that all payments comply with the laws of each country to protect the interests of stakeholders.”
Sunil Kavuri, FTX Creditor Representative, July 2025
Impact on creditors and related interests
The freezing of refunds has caused outrage among many creditors, especially those in China and other restricted areas. Some creditors have chosen legal action, requesting a review of the decision.
For example, a Chinese creditor contacted a lawyer in New York to contest the ban, arguing that individuals should be allowed to hold cryptocurrency and USD abroad, thus USD transfers should not be prohibited.
“The legal ban on fund transfers not only affects the rights but also unfairly slows down the resolution process for creditors' claims.”
Will's Turmoil Chronicles, FTX Chinese Creditors, July 2025
Current progress on resolving disputed claims
According to the latest update, the total value of disputed claims has decreased from $6.5 billion to $4.6 billion. About $1.8 billion of this has been approved for distribution, and $2.7 billion is expected to be approved in the near future.
So far, the total approved claim value has reached $8.3 billion, helping to relieve some pressure on creditors.
Content Value (billion USD) Initial disputed claims 6.5 Current disputed claims 4.6 Approved claims 8.3 Expected further approvals 2.7
Frequently Asked Questions
Does FTX's freeze on payments affect all creditors? No, only creditors in 49 countries with restrictions or bans on cryptocurrency activities are affected. How can creditors in the blocked areas contest the decision? After the court's approval, they will receive a notice and have at least 45 days to file an objection. How long does it take to resolve disputes? The time depends on the legal review process and the court's ruling, which can take several months. Can creditors transfer their claims to others? Yes, but the effectiveness and legality depend on the laws of each region and have not been definitively confirmed. What is the current value of the disputes? As of July 2025, the total value of disputed claims is approximately $4.6 billion.
Source: https://tintucbitcoin.com/ftx-bi-chan-tai-49-khu-vuc/
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