(The Block) reports: FTX plans to exclude creditors in 'restricted areas' like China from debt allocation, and the Chinese creditors' representative submitted an objection.
A Chinese FTX creditor represents over 300 Chinese users and has formally submitted an objection to the U.S. Bankruptcy Court in Delaware, opposing a recent motion by FTX that may exclude creditors from certain countries from allocation eligibility.
According to previous documents, (The Block) estimates that FTX is reviewing approximately $800 million in claims, distributed across 49 jurisdictions that may be classified as 'restricted areas,' with China accounting for as much as 82%.
Objector: Chinese creditors 'have fully complied yet are unfairly excluded.'
This objection was submitted by creditor Weiwei Ji, who is also a representative of over 300 Chinese creditors. Although Ji pays taxes in Singapore, FTX classifies him as a 'Chinese creditor' due to holding a Chinese passport.
'My family has 4 FTX accounts verified through KYC, with total claims exceeding $15 million,' Ji wrote in the document. 'We have fully complied with all procedural requirements as planned, yet this motion threatens our rights to allocation in an arbitrary and unfair manner.'
FTX proposal: Countries that cannot distribute compliantly may 'abandon their claims.'
FTX's motion to rebuild the trust fund proposes to assess the allocability of debts in 49 countries that may be considered restricted, including China, Russia, Pakistan, and others.
The motion suggests FTX:
Hire local legal experts to assess whether allocations can be legally executed in these countries;
Once identified as 'unable to operate compliantly,' the region will be marked as a 'restricted jurisdiction';
If there are no objections in court, or if the objections are dismissed, FTX can legally abandon the debt allocation responsibilities for these regions and transfer them into a trust fund for other distributions.
Weiwei Ji: Listing China as a 'restricted area' has no legal basis.
'This proposal to list China as a 'restricted area' lacks factual and legal support,' Ji stated.
He pointed out that FTX claims are denominated in US dollars and can be legally distributed to Chinese users through Hong Kong accounts and other means. He also cited relevant cases from Celsius Network as evidence.
Additionally, Ji emphasized in the document:
Chinese courts recognize virtual assets as legal property;
Hong Kong has also introduced a supportive regulatory framework for crypto assets;
Such distribution actions pose no legal risks and should be seen as a necessary part of the bankruptcy process.
'Refusing to allocate to Chinese creditors is illegal,' he said. 'I urge the court to reject this motion that intends to classify China as a 'restricted area.'