FTX Seeks More Time to Address Creditors’ Opposition to $470M Foreign Claims Freeze
The FTX estate has requested additional time from a Delaware court to respond to over 90 objections against its proposal to halt repayments in certain foreign jurisdictions. This move targets countries with restrictive or unclear cryptocurrency laws and has drawn criticism from creditors globally.
Legal and Financial Implications of FTX’s Repayment Freeze
The FTX estate argues that repayments in these jurisdictions could lead to legal penalties, including fines and potential imprisonment for its directors. The estate’s ‘Motion for Leave’ aims to delay proceedings to address objections, underscoring the challenges of navigating international crypto regulations during bankruptcy.
Creditors’ Concerns and Next Steps
Creditors, especially from China—where 82% of the claims originate—have strongly opposed the freeze. Individuals like Weiwei Ji and ‘Mr. Purple‘ warn that the estate’s strategy could nullify their claims. With $1.4 billion in FTX claims unresolved, this case may influence future crypto bankruptcy proceedings.
Key Facts About FTX’s Foreign Claims Freeze
- The FTX estate seeks to pause repayments in 49 countries, impacting $470 million in claims.
- Chinese creditors hold $380 million of the affected claims.
- The estate cites potential legal risks in jurisdictions with strict crypto laws.
- Creditors fear their claims could become worthless.
