FTX warns that creditors in restricted countries could miss payments

• FTX may withhold payments in regions such as China and Russia
• Crypto asset distribution depends on local legal compliance
• Creditors have 45 days to contest judicial exclusions

FTX Recovery Trust has filed a proposal with the court to manage the distribution of payments to creditors located in jurisdictions classified as potentially restricted, including China, Russia, Pakistan, Ukraine and Saudi Arabia. The measure affects 5% of the estimated $16 billion in claims, with China accounting for 82% of that total.

The proposal calls for hiring local legal counsel to assess whether the distribution of crypto assets can be carried out legally in these countries. If compliance is not feasible, payments would be suspended and the respective amounts would return to the fund, which would redistribute the resources among the other creditors.

According to the document, “Distributions that cannot be made due to the unlawfulness of doing so under the laws of a Restricted Foreign Jurisdiction will not be made and any interest in such Distribution will revert to the FTX Recovery Fund.”

The proposal includes the creation of a formal objection procedure. If the fund determines that a jurisdiction is restricted, creditors will be notified and given 45 days to file objections. If no objections are received or are rejected, payments will be cancelled.

The hearing that could approve these measures is scheduled for July 22. If approved, the FTX Recovery Trust team will begin the process of notifications, legal assessments, and handling of potential challenges, while keeping overall claims processing ongoing.

FTX currently works with three distributors, including Payoneer, to enable payments in 93 jurisdictions. However, users on social platforms continue to report geo-exclusions even after the expanded support.

“I will definitely take action and raise objections at every step,” said X-Net user @zhetengji, referring to China’s proposed exclusion. For many creditors in these regions, legal uncertainty and uncertainty about payments are adding to the frustration of recovering crypto assets.

I've already contacted my lawyer in New York and am waiting for her response.

I will definitely take action and will raise objections at every stage.

I also hope more people will step up. We can't just sit and wait—this is absolutely unreasonable.

While mainland China does not…

— Will的折腾纪 (@zhetengji) July 3, 2025