FTX Faces Legal Pushback from Chinese Creditors Over Payout Freeze

FTX is encountering increasing legal challenges as Chinese creditors oppose the exchange's proposed payout freeze for users in restricted jurisdictions. Weiwei Ji, a Singapore-based claimant representing over 300 Chinese account holders, has formally objected in Delaware Bankruptcy Court, disputing FTX's classification and payout restrictions. The conflict stems from FTX's July 2 motion to halt distributions to certain users, sparking a heated debate over fairness and jurisdiction in the ongoing bankruptcy proceedings.

Chinese Creditors Challenge FTX's Payout Freeze in Bankruptcy Court

FTX faces mounting legal pressure as Chinese creditors push back against the exchange's proposed payout freeze for users in restricted jurisdictions. Weiwei Ji, a Singapore-based claimant representing over 300 Chinese account holders, filed a formal objection in Delaware Bankruptcy Court, contesting FTX's classification system and payout restrictions.

The dispute centers on FTX's July 2 motion to pause distributions to users in 49 countries with ambiguous crypto regulations. Chinese claimants constitute 82% of the $470 million in restricted jurisdiction claims, with $380 million at stake. Ji maintains that USD payouts remain legally permissible in China, where courts recognize crypto assets as personal property.

Four verified FTX accounts belonging to Ji's family hold combined claims exceeding $15 million. The objection argues the proposed freeze constitutes arbitrary treatment, noting all verification requirements were met. "This jeopardizes our right to distribution in an inequitable manner," Ji stated in court filings.

Chinese Creditor Challenges FTX's Plan to Withhold Payouts

A Chinese creditor representing approximately 300 FTX account holders has formally objected to the bankrupt exchange's proposal to block payouts in certain jurisdictions, including China. Weiwei Ji, who holds a Chinese passport but is based in Singapore, filed the objection in Delaware Bankruptcy Court, citing concerns over discriminatory treatment.

Ji claims his family's four KYC-verified FTX accounts hold cumulative claims exceeding $15 million. "We have followed all procedures according to the plan," he stated in court documents. "This motion risks subjecting us to uneven distribution of our rights."

The objection comes as FTX Recovery Trust seeks to settle claims in 49 jurisdictions with crypto restrictions. The trust proposes case-by-case legal reviews to determine payout feasibility, with unclear or prohibited claims being waived and reassigned to the trust.