The FTX cryptocurrency exchange liquidation team is petitioning the Delaware court to extend the time to handle disputes related to the $470 million payment freeze plan.

The payment freeze plan with over 90 complaints from creditors across 49 territories, in which China occupies the largest share, is causing fierce controversy among stakeholders.

MAIN CONTENT

  • FTX requests an extension to process over 90 complaints with a plan to freeze payments of $470 million.

  • 49 territories are classified as 'restricted areas', with China accounting for 82% of the value of the complaints.

  • Creditors strongly oppose due to the risk of losing their rights, with the amount of pending complaints estimated at $1.4 billion.

What does FTX's request for an extension to handle payment freeze disputes mean?

According to information from the Delaware court, the FTX liquidation team has filed for an extension to have more time to handle over 90 objections from creditors regarding the plan to pause payments worth $470 million. This extension helps the asset management team arrange a debt repayment plan with careful legal considerations.

The initial plan listed 49 restricted territories, in which China represented the majority of the payment requests — about $380 million, accounting for 82%. Refunds to these areas are warned to potentially encounter serious legal risks for senior leaders.

"We need time to ensure that payments to creditors do not create legal liability and harm stakeholders," said a representative of the FTX liquidation team.

Mr. John Ray III, CEO of FTX Liquidation Unit, July 2024

Why are creditors opposing FTX's payment freeze plan?

Creditors, especially representatives of the group of Chinese creditors, strongly oppose because they believe that freezing payments violates legal rights. Creditor Weiwei Ji is gathering hundreds of investors to oppose this decision to protect collective interests.

Additionally, according to information from another senior creditor, Sunil Kavuri, the total amount of unresolved payment requests still reaches $1.4 billion, indicating that the scale of the dispute is still very large and complex.

"We will fight to protect the rights of investors who have suffered losses, and we do not accept that freezing payments affects the trust in the cryptocurrency market," Mr. Weiwei Ji stated.

Weiwei Ji, representative of Chinese creditors, July 2024

What legal risks does FTX face when executing payment refunds?

According to the petition, payments to the restricted areas could entail criminal liability for senior leaders, especially when legal regulations in different countries may conflict. This makes the liquidation team cautious in every step of implementation.

Cryptocurrency legal experts say FTX leaders must carefully consider the legal basis for each region to avoid criminal liability risks while protecting creditors' rights during the asset restructuring process.

Analyzing the differences of the restricted areas in FTX's plan

Region Complaint Rate (Million USD) Reason for being listed as restricted Legal Risks China 380 million (82%) Strict regulatory management, criminal risk Senior leaders may be criminally prosecuted 48 other territories 90 million (18%) Diverse legal regulations, difficult to handle collectively Litigation and dispute risks

Frequently Asked Questions

1. Why does FTX need to extend the time to process complaints related to the payment freeze project?

A complex plan with over 90 objections from various territories, particularly concerning serious legal disputes. The extension helps the liquidation team ensure caution and compliance with legal procedures.

2. Why does China account for a large portion of the complaint value in the FTX case?

China has many creditors with large amounts of frozen funds, accounting for up to 82% of the total debt value, leading to strong opposition from local investors.

3. How might the mentioned legal risks affect FTX leaders?

Incorrect payments could lead to criminal prosecution for leaders, posing significant obstacles to the liquidation and recovery of assets.

4. How much unresolved complaint money is there?

Currently, there is over $1.4 billion in unresolved debt, reflecting the large scale of the case and the pressure on the liquidation team.

5. What can creditors do to protect their rights?

Creditors are gathering to oppose the freeze plan and demand a fair resolution based on legal grounds and relevant regulations.

Source: https://tintucbitcoin.com/ftx-xin-hoan-phan-hoi-tranh-chap-no/

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