FTX Recovery Trust Proposes Claims Process for 49 Jurisdictions Including China

The FTX Recovery Trust has proposed a new claims process for users from 49 jurisdictions where cryptocurrency is restricted, including China. This move is in response to the complex legal landscape surrounding cryptocurrency regulations and the need to address the claims of users affected by the FTX collapse. The trust aims to ensure that creditors from these regions are fairly compensated, despite the challenges posed by varying legal frameworks and the lack of a clear legal basis for the claims process in some jurisdictions.

Chinese crypto KOL @zhetengji commented on the issue, stating that FTX's debt is denominated and settled in USD and has now entered the compensation distribution stage, which has nothing to do with cryptocurrency regulation. Chinese citizens receiving USD compensation do not face any legal risks. The FTX Recovery Trust's motion lacked a legitimate legal basis from the beginning. Furthermore, in the Celsius bankruptcy case, which is also a U.S. cryptocurrency company, they compensated creditors through bank wire transfers, and Chinese creditors also received compensation smoothly. @zhetengji believes that FTX can compensate Chinese creditors in the same way.

Earlier, FTX creditor representative Sunil posted on social media that in FTX's claims from restricted countries, 82% of the claim funds belong to Chinese users. However, cryptocurrency trading is currently not allowed in China, and there are no authorized distributors. According to the documents provided by Sunil, FTX will seek legal advice, and if it is possible to distribute to potential jurisdictions outside the restricted foreign jurisdictions, it will do so. If it is determined that residents belong to restricted foreign jurisdictions and claims will be controversial, the distribution may be confiscated.

The new claims process is particularly significant for users in regions where cryptocurrency is banned or heavily restricted. These users face unique challenges in seeking compensation, as the legal basis for their claims is often unclear. The FTX Recovery Trust's proposal seeks to address this issue by providing a structured process for creditors to submit their claims and receive compensation in USD. This approach aims to simplify the claims process and ensure that creditors are treated fairly, regardless of their location.

The decision to compensate creditors in USD is a strategic move by the FTX Recovery Trust. By using a widely accepted and stable currency, the trust aims to minimize the risk of currency fluctuations and ensure that creditors receive a fair and predictable compensation. This approach also aligns with the trust's goal of providing a transparent and efficient claims process, which is essential for rebuilding trust in the cryptocurrency industry.

The new claims process is expected to have a significant impact on the cryptocurrency industry, as it sets a precedent for how claims should be handled in cases of cryptocurrency collapses. By providing a structured and transparent process for creditors to submit their claims and receive compensation, the FTX Recovery Trust aims to promote greater accountability and transparency in the industry. This, in turn, could help to rebuild trust in cryptocurrency and encourage greater adoption of the technology.

The FTX Recovery Trust's proposal is a positive step towards addressing the challenges faced by creditors in regions where cryptocurrency is restricted. By providing a structured and transparent claims process, the trust aims to ensure that creditors are fairly compensated and that the cryptocurrency industry can move forward with greater accountability and transparency. However, the success of the new claims process will depend on the court's decision and the trust's ability to implement the process effectively.