FTX May Deny Claims to Victims In China and Other Restricted Jurisdictions
The post FTX May Deny Claims to Victims In China and Other Restricted Jurisdictions appeared on BitcoinEthereumNews.com. Chinese FTX users, who represent a staggering 82% claims from the bankrupt crypto exchange, are at the risk of losing funds, due to the crypto ban in China. In order to settle this issue, the crypto exchange has requested the U.S. bankruptcy court to approve a new claims process for users from 49 “restricted jurisdictions.” According to the proposal, FTX would only honor claims from these regions if legal counsel confirms payouts are permissible under local law. If not, those claims may be disputed or outright denied. FTX Seeks Court Approval for Claims in Restricted Regions Bankrupt crypto exchange faces a major challenge ahead of handling users’ claims from 49 restricted jurisdictions, where there are strict crypto regulations or a crypto ban. While only 5% of total allowed claims come from these regions, a staggering 82% of these come only from the Chinese users. Since China banned crypto trading in 2021, the existing legal restrictions on cross-border payouts could leave Chinese claimants with nothing. In May, FTX kickstarted the second phase of creditor repayment, while distributing a total of $5 billion to users. The exchange stated that it will seek legal opinions to determine whether distributions can be made to users in these jurisdictions. If legally permissible, FTX intends to proceed with payouts. However, if the claimant determines to stay within the restricted jurisdiction, there’s no legal pathway into this, and the claim can be formally disputed. FTX will then file an objection in court, and unless the issue is resolved, those users risk forfeiting their right to receive any distribution, as reported by creditor Sunil, citing legal court documents. Chinese Users Seek Legal Action Chinese users have come forward to resolve this issue, stating that they would be seeking legal action on this matter. X platform user Will, who…
The post FTX May Deny Claims to Victims In China and Other Restricted Jurisdictions appeared on BitcoinEthereumNews.com.
Chinese FTX users, who represent a staggering 82% claims from the bankrupt crypto exchange, are at the risk of losing funds, due to the crypto ban in China. In order to settle this issue, the crypto exchange has requested the U.S. bankruptcy court to approve a new claims process for users from 49 “restricted jurisdictions.” According to the proposal, FTX would only honor claims from these regions if legal counsel confirms payouts are permissible under local law. If not, those claims may be disputed or outright denied. FTX Seeks Court Approval for Claims in Restricted Regions Bankrupt crypto exchange faces a major challenge ahead of handling users’ claims from 49 restricted jurisdictions, where there are strict crypto regulations or a crypto ban. While only 5% of total allowed claims come from these regions, a staggering 82% of these come only from the Chinese users. Since China banned crypto trading in 2021, the existing legal restrictions on cross-border payouts could leave Chinese claimants with nothing. In May, FTX kickstarted the second phase of creditor repayment, while distributing a total of $5 billion to users. The exchange stated that it will seek legal opinions to determine whether distributions can be made to users in these jurisdictions. If legally permissible, FTX intends to proceed with payouts. However, if the claimant determines to stay within the restricted jurisdiction, there’s no legal pathway into this, and the claim can be formally disputed. FTX will then file an objection in court, and unless the issue is resolved, those users risk forfeiting their right to receive any distribution, as reported by creditor Sunil, citing legal court documents. Chinese Users Seek Legal Action Chinese users have come forward to resolve this issue, stating that they would be seeking legal action on this matter. X platform user Will, who…
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