FTX still has about 1.4 billion USD in undistributed debt, of which China accounts for 380 million USD in limited debt.

Debt management is facing difficulties due to limited area debts and incomplete KYC verification requirements, leading to disputed assets totaling up to 660 million USD.

MAIN CONTENT

  • FTX has not yet processed 1.4 billion USD in debt, including 470 million USD in limited area debt.

  • China accounts for 82% of limited area debt with 380 million USD.

  • Disputes and incomplete KYC are causing 950 million USD in debt to face legal difficulties.

How much undistributed debt does FTX have and what is the nature of that debt?

The head of debt management at FTX, Mr. Sunil, stated that there is still about 1.4 billion USD in undistributed debt, of which 470 million USD is limited debt by region. This figure mainly affects creditors in China, who account for up to 82% of the limited debt with 380 million USD.

This indicates that the restructuring of debt and compensation for FTX asset holders is facing significant obstacles due to legal regulations and local restrictions preventing assets from being freely converted or recovered.

Why is FTX's debt facing difficulties in verification and distribution?

The majority of undistributed debts relate to many creditors who have not completed the KYC verification process. The total amount of debt in this group is approximately 290 million USD in the Bahamas, with many more debts in dispute totaling 660 million USD.

Not completing KYC means that creditors are not officially recognized in the bankruptcy proceedings, slowing down the resolution and asset distribution process. This is a significant challenge for the restructuring team and regulatory authorities.

"The application of limited handling procedures in court aims to strictly manage assets and debts related to areas with complex legal conditions, especially for China and the Bahamas."

Sunil, FTX creditor representative, July 2024

What is the total amount of debt that FTX expects to be accepted?

Currently, FTX estimates the total amount of debt recognized by the court to be around 11 billion USD. However, with many debts in dispute or limited, the actual amount distributed may be much lower.

Moreover, the application of 'limited' handling procedures may cause creditors in China and other jurisdictions to lose their right to compensation, thereby directly affecting asset recovery.

"We hope the debt distribution process is transparent, but there are still many risk factors from legal disputes and incomplete KYC verification."

Sunil, representative of the FTX debt management team, July 2024

How does the limited debt handling process affect creditors?

The 'limited' handling procedure proposed by FTX aims to create a stricter legal framework for debt allocation by region. This could lead to some territories, such as China, losing their right to claim debts, especially with debts classified as limited.

Thus, many creditors in these areas face the risk of not being paid or losing rights due to failing to meet the court's documentation and KYC requirements.

The actual challenges of legal and debt management in the FTX case

Debt management in the FTX case is considered the most complex due to overlapping legal systems and KYC regulations from many countries. The report from the creditor representative indicates that delays in debt verification and distribution extend the recovery time for investors' assets.

The fact that over 1.3 billion USD in debts are limited and in dispute raises concerns about the full recovery of funds for stakeholders. Financial experts say this is a lesson for risk management and legal compliance in the cryptocurrency industry.

Frequently Asked Questions

  • How much undistributed debt does FTX have?
    About 1.4 billion USD in undistributed debt, mainly limited area debt.

  • Why has much of FTX's debt not been distributed?
    Due to incomplete KYC and legal disputes between jurisdictions.

  • What percentage of limited debt does China account for?
    About 82% of the limited area debt, equivalent to 380 million USD.

  • What is the total amount of debt expected to be accepted by FTX?
    Estimated at around 11 billion USD according to the latest data.

  • How does the 'limited' handling procedure affect creditors?
    It may cause some creditors to lose their right to compensation due to strict legal regulations.

Source: https://tintucbitcoin.com/ftx-no-nguoi-dung-tq-380-trieu-usd/

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