Chinese Creditors Clash with FTX Over Billions in Frozen Payouts – Who Gets Paid First?

FTX's bankruptcy saga takes another dramatic turn as Chinese creditors push back against the exchange's attempt to withhold billions in repayments.

Behind the legal firewalls: A high-stakes battle over who gets priority in the crypto carcass buffet.

While FTX lawyers argue for 'fair distribution,' creditors smell blood—and their own money—in the water.

Bonus jab: Nothing unites global finance like a good old-fashioned scramble for scraps.

Crypto holdings, not trading, are ‘lawful’ under Chinese laws

While retail trading may be restricted, Ji argued that crypto ownership remains legal in the country, with courts recognizing assets like Bitcoin (BTC) and ethereum (ETH) as personal property. This view has been supported by past rulings, including a 2024 ruling by a Shanghai Court that affirmed the protection of digital assets under civil law.

He also pointed out that Hong Kong, which maintains a more favorable stance on crypto, operates under a separate legal framework and actively supports regulated digital asset activity.

Supporting his case, Ji cited legal precedent, including the Celsius bankruptcy, where Chinese users were paid in USD, and the Mt. Gox rehabilitation, where Chinese creditors successfully received crypto payouts through Kraken, emphasizing that neither case imposed restrictions based on jurisdiction.

FTX’s motion remains under review ahead of a court hearing scheduled for July 22, and Ji is urging the court to reject any designation that would exclude Chinese creditors from receiving their share under the bankruptcy plan.