{"id":13881,"date":"2025-07-10T00:39:33","date_gmt":"2025-07-09T22:39:33","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=13881"},"modified":"2025-07-10T00:39:33","modified_gmt":"2025-07-09T22:39:33","slug":"ftxs-proposal-to-halt-repayments-in-select-nations-sparks-controversy","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/07\/10\/ftxs-proposal-to-halt-repayments-in-select-nations-sparks-controversy\/","title":{"rendered":"FTX’s Proposal to Halt Repayments in Select Nations Sparks Controversy"},"content":{"rendered":"

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A Chinese lender has submitted<\/a> an objection to a motion from the FTX estate that seeks to halt payments to individuals in areas with laws or statutes limiting cryptocurrency operations, as stated in a court filing from Tuesday.<\/p>\n

The creditor, Weiwei Ji, indicated that despite residing in Singapore, they are classified as a Chinese creditor due to possessing a Chinese passport. Ji mentioned that the objection was filed on behalf of Ji and an expanding group of Chinese creditors \u2014 reportedly more than 300 individuals, according to the filing.<\/p>\n

Excerpt from Weiwei Ji\u2019s objection. Source: Kroll<\/em><\/figcaption><\/figure>\n

The objection presents two primary points: Firstly, that FTX settlements occur in US dollars, which are a recognized legal payment method. Secondly, it asserts that cryptocurrency distributions are permissible in China, with digital assets considered as \u201cpersonal property.\u201d<\/p>\n

\u201cMy family possesses four KYC-verified accounts with total claims surpassing $15 million USD\u2026 We have adhered fully to all procedural mandates under the Plan. The proposed motion now endangers our entitlement to distribution in an arbitrary and unjust manner,\u201d Ji contends in the document.<\/p>\n

Related: <\/strong><\/em>FTX\u2019s two-year repayment delay is a \u2018win,\u2019 asserts trader who predicted FTX\u2019s downfall<\/strong><\/em><\/a><\/p>\n

The FTX Estate\u2019s motion elaborated<\/h2>\n

The FTX Estate submitted<\/a> a motion on July 2 to pause payments to residents of restricted nations, stating that \u201cDistributions made by or on behalf of the FTX Recovery Trust into areas that contravene these legal restrictions may incur fines and penalties, including personal liability for directors and officers, and\/or criminal consequences up to imprisonment.\u201d<\/p>\n

The motion from the FTX Estate identified 49 nations with ambiguous or stringent cryptocurrency laws<\/a>, which could potentially lead to challenges due to intricate cross-border legal issues.<\/p>\n

The motion was lodged with the US Bankruptcy Court in Delaware. As per the motion, 5% of the value of approved claims is owed to residents in these restricted regions.<\/p>\n

In addition to China, other possibly affected nations include Russia, Egypt, Afghanistan, Tunisia, Zimbabwe, Ukraine, and Moldova.<\/p>\n

The FTX Estate cited Moldova in its motion as an example. \u201cIn Moldova, it is a criminal act to engage in \u201cthe activity of providing services regarding virtual assets \u2026 on the territory of the Republic of Moldova, including in instances where this activity is ancillary to the primary activity.\u201d<\/p>\n

The FTX Estate initiated repayments on February 18<\/a>, starting with convenience class participants. The repayment values were calculated based on the worth of the digital assets at the time of the exchange\u2019s collapse in November 2022, a policy that upset some creditors.<\/p>\n

Magazine: <\/strong><\/em>The $2,500 documentary about the FTX collapse on Amazon Prime\u2026 with assistance from mom<\/strong><\/em><\/a><\/p>\n