The FTX Recovery Trust officially frozen creditors’ payments in 49 jurisdictions where cryptographic activity is limited or prohibited, citing the need for legal confirmation before proceeding. This decision was disclosed in a judicial file of July 2 and mainly affects regions such as China, Nigeria, Fiji and Andorra and Zimbabwe.
Although these jurisdictions represent only 5% of total complaints, 82% of the frozen value comes from China alone. Due to local laws in these regions, the FTX is faced with regulatory uncertainty as to whether it can legally distribute funds to residents.
What happens if users come from these jurisdictions?
FTX has implemented a “maintenance” system where all complaints from limited countries are now classified as “disputed”. The recovery trust will only deal with these complaints if legal advice confirm that distributions will not violate local laws. Until then, no funds will be given to these users. Once the court reported the process, each affected creditor will receive a “restricted jurisdiction”. This document will detail why the creditor is assigned and will give them a deadline, at least 45 days, to oppose.
The situation sparked a debate among the creditors, some stressing that users who have moved to crypto friendly countries are still not able to access their complaints. The lawyer’s lawyer FTX Sunil Kavuri said that it may be possible to transfer or sell complaints to entities in authorized courts, although it is not clear if it is a guaranteed solution.
Creditors retaliate
In response to the FTX, the Chinese FTX creditor 的折腾纪 (@zhetengji) announced that it will be a legal action after FTX has froze payments to users in countries like China. He has already contacted his New York lawyer and plans to oppose each stage. Will says that this decision is unfair because, even if the trading of cryptography is limited in China, people are always allowed to hold the crypto and the US dollars abroad. Since FTX will set complaints in USD, he wonders why wire transfers are not authorized. He urges other affected users not to remain silent and to join him to challenge the decision.
Disputed complaints
In a positive update, FTX has also updated its figures, revealing that the total amount of disputed complaints increased from $ 6.5 billion to $ 4.6 billion. About $ 1.8 billion in previously disputed complaints were approved and an additional $ 2.7 billion should soon be authorized. Until now, the total value of approved complaints has reached $ 8.3 billion, offering a certain relief to creditors awaiting clarity.
Until resolved, all affected complaints will remain contested, leaving billions of dollars suspended in the legal limbo.
Never miss a beat in the world of cryptography!
Stay in advance with the news, expert analysis and real -time updates on the latest Bitcoin, Altcoins, DEFI, NFTS, etc. trends
