The bankruptcy liquidation of FTX is stirring up waves again. On the 4th, creditor representative Sunli revealed in a tweet that investors from 49 restricted jurisdictions might be excluded from the compensation list due to local regulations, with the majority of creditor value originating from China.
Restricted Countries Face Loss of Rights
Sunli stated:
In the 49 jurisdictions, 5% of the claims belong to "restricted countries", with 82% of the claim value coming from China.
The reasons are local legal provisions:
1. Cryptocurrency trading is not allowed
2. No crypto distributors are permitted domestically.
Therefore, FTX's processing steps are as follows:
1. FTX will obtain legal advice;
2. If legal opinion suggests distribution to "potentially restricted foreign jurisdictions" is possible, FTX will execute;
3. If a claimant is determined to be a resident of a "restricted foreign jurisdiction":
a. The claim will be listed as a "disputed claim";
b. FTX will raise a formal objection;
c. If the dispute remains unresolved, the creditor will lose distribution rights.
In other words, the FTX liquidation committee is seeking legal advice to decide whether to distribute funds to restricted regions. If the answer is negative, related claims will be listed as disputed and may be invalidated, with local users unable to recover their funds.
Although the affected amount represents only 5% of approved claims, 82% is concentrated in China. With China not fully open to private cryptocurrency activities and fund distribution restricted, it becomes the biggest variable.
3AC's Astronomical Claim Impacts Recovery Rate
Another focus on the debt list is the $1.53 billion claim by Three Arrows Capital (3AC). FTX accuses 3AC of self-inflicting crisis through high-risk trading and believes the amount is severely exaggerated. If the court ultimately approves, other investors' recovery percentage could potentially decrease by about 20%. Currently, total disputed claims exceed $2.2 billion, adding complexity to the liquidation.
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