In the landscape of digital assets, Bitcoin is often in the spotlight, but the FTX case in recent months is raising crucial issues about the repayment methods for creditors worldwide, particularly in the so-called “restricted jurisdiction markets.”
The legal proceedings of FTX, with a particular focus on claims originating from China, are drawing new boundaries on how law and the distribution of cryptocurrencies intersect, directly impacting the fate of thousands of users around the globe.
The FTX case, Bitcoin, and the credits of restricted jurisdictions
FTX, one of the most influential digital asset exchange platforms of the last decade, has requested court approval for a procedure that will profoundly impact creditors residing in 49 restricted jurisdictions.
According to court documents, among the claim holders from these areas, a significant 82% of the total value is attributable to Chinese users, even though they represent only 5% of the number of admissible claims.
The FTX plan concerns exclusively territories where the trading of cryptocurrencies is prohibited or where the platform operated without the necessary distribution licenses.
Among these are, in addition to China, countries such as Russia, Iran, North Korea, Afghanistan, Algeria, Belarus, Cambodia, Egypt, Libya, Myanmar, Pakistan, Syria, and Zimbabwe.
The proposed procedure by FTX Recovery Trust establishes that all claims from jurisdictions considered at risk will remain in a “contested” state until favorable legal opinions are obtained for the distribution of the amounts.
The stated goal is to mitigate compliance risks related to local regulations on crypto assets and ensure that FTX does not violate either U.S. laws or those of the countries involved.
The interested creditors will receive 45 days’ notice to contest the status of their jurisdiction. In the event that they do not file formal objections within the specified period, they will automatically lose the right to the distribution of the sums.
The mechanism requires that each creditor intending to contest the exclusion must produce an affidavit, agreeing to submit to the jurisdiction of the American courts.
Such legal procedures involve significant costs and complexities, often not accessible to the average individual user.
In addition, the FTX Recovery Trust must submit affidavits waiving certain formal proceedings and accepting the jurisdiction of the competent courts for each objection received.
The objections from China: claims on the legitimate possession of Bitcoin and cryptocurrencies
Chinese creditors are already mobilizing through international legal actions to contest the inclusion of China among the countries with restricted jurisdiction.
Their argument is based on a key point of local regulations: while not supporting cryptocurrency trading, Chinese law recognizes the right of citizens to hold digital assets in the private sphere, classifying Bitcoin and similar as “commodity-type goods”.
From here, numerous users are entrusting U.S. law firms with the filing of objections at every procedural stage.
Not only that: the issue of payments in USD is also raised, given that the reconciliation of credits occurs in U.S. dollars and Chinese citizens can, within certain limits, hold foreign currency abroad according to the current foreign exchange control regulations.
From February 2025, FTX has implemented two main distribution rounds of funds to creditors. The first, reserved for creditors with less than $50,000 exposure (defined as “convenience class”), saw the allocation of 1.2 billion dollars.
The second round, intended for creditors with larger positions, took place in May 2025, with over 5 billion dollars disbursed.
To ensure greater accessibility to the liquidation of credits, FTX has added Payoneer as the third official distribution platform, alongside BitGo and Kraken, allowing payment in 93 jurisdictions.
However, users residing in restricted jurisdictions still do not have access to these distribution channels, remaining excluded from payments.
The restrictions imposed by the court and the FTX Recovery Trust threaten to further prolong the wait for thousands of creditors, many of whom have not received compensation since November 2022, the date of the FTX collapse.
This scenario accentuates the problem of financial exclusion in regions where access to crypto represented an alternative way of safeguarding savings compared to traditional banking systems.
The FTX case thus raises new questions about the repercussions of regulatory restrictions on Bitcoin and on the main digital assets in the emerging markets, where demand remains high but regulatory security is becoming increasingly uncertain.
Judicial cases connected: developments and repercussions
In addition to the issue of jurisdictions considered at risk, the court has rejected the requests of Three Arrows Capital (3AC), deeming them unfounded and more related to failed trading strategies than to alleged irregular liquidations by FTX.
The situation is made even more complex by the legal case of the former CEO Sam Bankman-Fried, currently imprisoned until December 2044 for fraud, and by the aftermath of civil lawsuits against celebrity endorsement.
Some, like Shaquille O’Neal, have reached a settlement of 1.8 million dollars; others, including Tom Brady and Kevin O’Leary, are still at the center of ongoing proceedings.
The current FTX affair and the issue of restricted jurisdictions project a scenario of great uncertainty for creditors dealing with the slow recovery of funds.
Despite more than 6.2 billion dollars having already been disbursed, thousands of users risk being left without compensation due to the intertwining of local regulations, compliance, and procedural requirements.
As a result, the outcome of this debate will strongly influence not only the upcoming distributions but also the way digital asset platforms like FTX and Bitcoin investors will relate to future regulatory developments at an international level.
For those operating in high-risk countries, it remains essential to monitor every update and evaluate legal actions or defensive strategies to protect the right to recover their own assets.
