Chinese Creditors Challenge FTX's $470 Million Payout Freeze

Over 500 Chinese creditors are challenging FTX's recent legal maneuver to freeze $470 million in payouts to users in jurisdictions with restrictive or uncertain crypto laws. This group is turning to US courts and regulators, expressing concerns about fairness, transparency, and procedural integrity. A Chinese creditor named Will, who has retained a US attorney, is part of this growing community organizing their response against FTX’s decision.

Will revealed that dozens of affected users have already sent formal objections to the bankruptcy court. He stated, “So far, 35 people from our group have mailed letters to the judge.” He is working closely with a growing group of Chinese creditors, now over 500 members, many of whom are taking coordinated actions such as writing letters to the judge and US Trustee, and exploring group legal representation.

Their frustration centers around a recent FTX motion asking the court for permission to hold back $470 million in distributions to creditors in countries with ambiguous crypto rules. China accounts for the majority of this amount, with $380 million in claims, or roughly 82% of the restricted total. Will stressed that “$470 million is not just a cold number — behind it are countless families already hurt once. A second wound is unfolding. We can’t stay silent.”

Speaking on behalf of the Chinese creditors, Will argues that FTX’s move contradicts earlier assurances. He stated, “We were told clearly: as long as we submitted our claims and voted in favor of the plan, we would be entitled to receive our distributions like everyone else. Based on that understanding, we cooperated, our claims were verified, and we supported the reorganization plan in good faith.” He argues that this reversal erodes trust in the process. FTX’s new legal move could deny them their rightful compensation because of their “nationality or perceived legal uncertainty.”

Will said, “This situation is not only unfair—it’s procedurally questionable. A confirmed plan should not be altered in a way that selectively strips rights from certain creditors after the fact. We believe such changes, especially those targeting a group of people based solely on jurisdiction, deserve close scrutiny from the court.” FTX claims it is trying to avoid legal risk by not sending funds to countries where crypto use may be restricted. However, critics see this as a dangerous precedent that could selectively undermine the rights of verified claimants after a reorganization plan has already been confirmed.

Will concluded, “At the end of the day, this is not just about money—it’s about fairness, credibility, and trust in the system. We are not asking for special treatment; we are asking to be treated equally under the same rules as everyone else. A confirmed distribution process should not be altered at the last stage to selectively exclude those who have already done everything required of them.”