A Chinese creditor has objected to a motion by FTX's asset management that seeks to suspend payments to residents living in jurisdictions with restrictive cryptocurrency trading laws, according to court documents filed on Tuesday.
Creditor Weiwei Ji stated that despite residing in Singapore, he is classified as a Chinese creditor due to holding a Chinese passport. Weiwei Ji noted that the objection was submitted on behalf of himself and a growing group of Chinese creditors—according to the documents, this group has exceeded 300 individuals.
The objection raised two key arguments: first, that the FTX settlement is conducted in US dollars, which is the standard legal repayment method. Secondly, it pointed out that cryptocurrency distribution is legal in China, and digital assets constitute "personal property."
"My family holds four KYC-verified accounts, with a total claim amount exceeding $15 million… We have fully complied with every procedural requirement under the plan. The proposed motion now jeopardizes our distribution rights in an arbitrary and unfair manner," Weiwei Ji argued in the documents.
FTX's asset management submitted the motion to suspend payments to residents of restricted countries on July 2, stating that "FTX's restoration of trust in violation of these legal restrictions on distributions to jurisdictions may trigger fines and penalties, including personal liability for directors and executives, and/or criminal penalties including imprisonment."
The motion identified 49 countries with ambiguous or restrictive cryptocurrency laws, where risks may arise due to complex cross-border legal complications.
The motion has been submitted to the U.S. Bankruptcy Court for the District of Delaware. According to the motion, 5% of the allowed claim value is allocated to residents of these restricted jurisdictions.
In addition to China, potentially restricted countries include Russia, Egypt, Afghanistan, Tunisia, Zimbabwe, Ukraine, and Moldova.
FTX's asset management cited Moldova as an example in its motion. "In Moldova, engaging in 'activities related to providing virtual asset services within the territory of the Republic of Moldova… including cases where such activities are auxiliary/supplementary to the main activity' is a criminal offense."
FTX's asset management began repayments on February 18, starting with convenience class members. The repayment amounts are based on the value of digital assets at the time of the exchange's collapse in November 2022, a policy that has angered some creditors.
Related: South Korea plans to lift restrictions on cryptocurrency venture capital business
Original article: “Chinese Creditor Questions FTX's Motion to Suspend Payments to Restricted Countries”
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