FTX froze $470M in payments to creditors from 49 regions, citing legal concerns — with Chinese users holding $380M, or 82% of restricted claims.
Over 500 Chinese creditors are organizing legal action, alleging FTX broke earlier promises and violated equal treatment principles in bankruptcy law.
Legal and jurisdictional conflicts highlight challenges in global crypto regulation as users question fairness and transparency in FTX’s bankruptcy process.
In July 2025, a storm swept through the cryptocurrency industry in a Delaware bankruptcy court in the United States. The bankrupt cryptocurrency exchange FTX sparked outrage among over 500 Chinese creditors by freezing $470 million in creditor payments.
These creditors are now organizing and challenging the U.S. court through legal means, arguing that FTX has violated earlier promises and deprived them of their legitimate rights.
As the largest group holding $380 million in claims (82% of the restricted claims), Chinese creditors are at the forefront of this struggle.
This controversy not only reveals the complexity of the FTX bankruptcy case but also highlights the differences and challenges in the global cryptocurrency regulatory environment.
FTX BANKRUPTCY AND THE PAYMENT FREEZE BACKGROUND
FTX was once one of the world’s leading cryptocurrency exchanges, but in November 2022, it collapsed due to allegations of fraud, fund misappropriation, and mismanagement, leaving billions of dollars in customer funds in limbo.
Subsequently, FTX entered bankruptcy proceedings, with the FTX Recovery Trust tasked with clearing debts and distributing funds to creditors.
According to the restructuring plan, FTX was expected to gradually distribute payments to creditors through a $16.5 billion repayment plan, with $1.2 billion and $5 billion already distributed in February and May 2025, respectively.
However, on July 2, 2025, FTX filed a motion with the Delaware bankruptcy court requesting a suspension of approximately $470 million in payments to creditors in 49 jurisdictions, including China, Russia, and Nigeria, citing legal restrictions or uncertainties surrounding cryptocurrency transactions in these regions.
Specifically, FTX claimed that China’s cryptocurrency trading ban, in place since 2021, could make distributing funds to Chinese creditors a violation of local laws, necessitating further legal advice to ensure compliance.
Of the $470 million in restricted claims, Chinese creditors hold $380 million, accounting for 82%, making them the most affected group.
This decision not only enraged Chinese users but also sparked widespread discussions about fairness, transparency, and legal conflicts in global bankruptcy proceedings.
CHINESE CREDITORS’ ANGER AND RESISTANCE
For Chinese creditors, FTX’s payment freeze decision was a devastating blow. Many of them actively cooperated with the restructuring plan after FTX’s bankruptcy, submitting claims and voting in favor of the bankruptcy plan.
According to a Chinese creditor using the pseudonym Will, FTX had explicitly promised during the early stages of the bankruptcy that as long as creditors completed the claims process and supported the restructuring plan, they would receive distributions like other users.
However, the July 2 motion left them feeling betrayed.
“FTX told us that as long as we submitted the required documents, we would get our rightful compensation. Now they’re refusing to pay us, citing nationality and legal uncertainties. This is completely unfair!” Will said angrily in an interview.
He also revealed that over 500 Chinese creditors have organized through social media and dedicated communication channels, hiring U.S. lawyers to prepare legal objections to the court.
These creditors believe that FTX’s decision not only violates earlier promises but may also involve discrimination against users from specific countries.
They question whether FTX is using complex international legal differences to evade responsibility and express skepticism about the transparency and basis of the freeze process.
For instance, FTX has not publicly disclosed which specific legal provisions led to Chinese creditors being placed on the restricted list, nor has it provided a clear solution or timeline.
THE COMPLEX INTERPLAY OF LAW AND REGULATION
One of the core issues in the FTX payment freeze is the variance in global cryptocurrency regulatory environments. China has banned cryptocurrency trading and related activities since 2021, creating potential legal risks for FTX in distributing funds to Chinese creditors.
However, creditors question this rationale: since their funds on the FTX platform were invested before China’s ban took effect, and FTX’s operating entity is based in the Bahamas, not China, why should their claims be subject to Chinese law?
Furthermore, FTX’s motion has raised concerns about the principle of “equal treatment of creditors” in international bankruptcy proceedings.
Under U.S. bankruptcy law, bankruptcy processes typically require treating all creditors equally, but FTX’s approach appears to exclude creditors from specific countries.
Whether this differential treatment is lawful and aligns with the fairness principles of bankruptcy law is a key issue that Chinese creditors and their legal teams are preparing to challenge.
CONCLUSION
The $470 million FTX payment freeze storm is not just a dispute over fund distribution but also a test of fairness, transparency, and globalization.
For Chinese creditors, this struggle is about $380 million in claims and, more broadly, about trust in promises and the pursuit of justice.
As over 500 Chinese creditors embark on their legal battle, the future developments in the FTX bankruptcy case will continue to attract attention.
This controversy serves as a reminder that the rapid development of the cryptocurrency industry has far outpaced the adaptability of existing legal frameworks.
In a globalized financial market, balancing regulatory requirements across countries, protecting user rights, and maintaining industry stability remains a complex challenge for all stakeholders.
The resistance of Chinese creditors may become a significant force in advancing this process.
〈Chinese Creditors vs. FTX – The Fight Over Frozen Payments〉這篇文章最早發佈於《CoinRank》。
