FTX Seeks Court Backing to Deny Claims from Banned Crypto Regions
The post FTX Seeks Court Backing to Deny Claims from Banned Crypto Regions appeared on BitcoinEthereumNews.com. Altcoins As the collapsed crypto exchange FTX advances with its repayment process, a looming legal hurdle may block tens of thousands of Chinese users from recovering their funds. The issue stems from China’s ongoing ban on crypto transactions, which could complicate or even invalidate claims submitted by residents. In a recent motion filed with a U.S. bankruptcy court, FTX has asked for special approval to handle claims from nearly 50 regions deemed “restricted” due to local laws. While only a fraction of global claims come from these jurisdictions, the vast majority—over 80%—are tied to users based in mainland China. Under the proposed plan, users in those regions would need confirmation from legal experts that local laws allow such payouts. Without that assurance, FTX could formally challenge or reject their claims. Those who choose to remain in banned jurisdictions may face the prospect of being completely excluded from any recovery. The exchange, which began its second wave of creditor repayments in May, is attempting to navigate international regulatory conflicts as it distributes billions back to former customers. But for Chinese claimants, whose crypto holdings may be legally recognized as property but not tradable under national law, the path forward is murky. Some Chinese creditors aren’t staying silent. At least one user has confirmed initiating legal consultations in New York to oppose FTX’s approach, questioning why international transfers in USD are being blocked if crypto ownership is still legal in China. FTX-affiliated community members have suggested that selling or transferring claims to a third party in a permitted jurisdiction may be the only alternative for users caught in legal limbo. As the court considers the proposed claims process, users in restricted regions may soon be forced to choose between legal challenges, claim transfers—or walking away with nothing. Author Alexander Stefanov Reporter at…
The post FTX Seeks Court Backing to Deny Claims from Banned Crypto Regions appeared on BitcoinEthereumNews.com.
Altcoins As the collapsed crypto exchange FTX advances with its repayment process, a looming legal hurdle may block tens of thousands of Chinese users from recovering their funds. The issue stems from China’s ongoing ban on crypto transactions, which could complicate or even invalidate claims submitted by residents. In a recent motion filed with a U.S. bankruptcy court, FTX has asked for special approval to handle claims from nearly 50 regions deemed “restricted” due to local laws. While only a fraction of global claims come from these jurisdictions, the vast majority—over 80%—are tied to users based in mainland China. Under the proposed plan, users in those regions would need confirmation from legal experts that local laws allow such payouts. Without that assurance, FTX could formally challenge or reject their claims. Those who choose to remain in banned jurisdictions may face the prospect of being completely excluded from any recovery. The exchange, which began its second wave of creditor repayments in May, is attempting to navigate international regulatory conflicts as it distributes billions back to former customers. But for Chinese claimants, whose crypto holdings may be legally recognized as property but not tradable under national law, the path forward is murky. Some Chinese creditors aren’t staying silent. At least one user has confirmed initiating legal consultations in New York to oppose FTX’s approach, questioning why international transfers in USD are being blocked if crypto ownership is still legal in China. FTX-affiliated community members have suggested that selling or transferring claims to a third party in a permitted jurisdiction may be the only alternative for users caught in legal limbo. As the court considers the proposed claims process, users in restricted regions may soon be forced to choose between legal challenges, claim transfers—or walking away with nothing. Author Alexander Stefanov Reporter at…
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