Chinese Creditor Challenges FTX Motion to Halt Payouts in Restricted Countries
A Chinese creditor, Weiwei Ji, has formally objected to a motion by the FTX estate that would suspend repayments to residents in jurisdictions with restrictive cryptocurrency laws. This legal challenge introduces new complexity to the ongoing FTX bankruptcy proceedings, particularly regarding cross-border financial regulations.
The Creditor’s Position
Representing over 300 Chinese creditors, Weiwei Ji (a Singapore resident with Chinese citizenship) presents two key arguments:
- FTX’s proposed settlements in US dollars constitute legal tender for repayments
- Chinese law recognizes digital assets as protected personal property
Ji’s filing notes their family holds verified claims exceeding $15 million across multiple accounts.
FTX’s Legal Concerns
The FTX Estate filed its controversial motion on July 2, seeking to pause distributions to 49 jurisdictions with uncertain or prohibitive crypto regulations. The estate warns that improper payouts could expose trustees to:
- Substantial financial penalties
- Potential criminal liability
- Personal sanctions against officers
Repayment Controversy
Since initiating repayments on February 18, FTX has calculated amounts based on November 2022 asset values – a methodology that has drawn criticism from creditors expecting current market valuations.
Key Facts
- The objection represents 300+ affected Chinese creditors
- 49 jurisdictions face potential payment suspensions
- 5% of total claims involve restricted regions
- Moldova cited as example of strict virtual asset laws
