FTX Seeks Court Approval for Claims Process in Restricted Crypto Jurisdictions
FTX is asking the court to approve a new claims process. This could impact creditors in 49 countries where crypto is banned or restricted. The bankrupt crypto exchange wants a framework to handle claims from these areas.
In a recent filing, FTX creditor advocate Sunil shared details. The plan affects billions in expected recoveries. The recovery estate is still processing distributions after the November 2022 crash.
Over 82% of disputed claims come from China. Other affected countries include Russia,Egypt,Morocco,and North Korea. Under the plan, claims from these areas would be disputed unless FTX gets legal advice confirming payouts are allowed.
If legal advice is negative, claims may be denied. Funds would be forfeited.FTX will notify affected users, giving them 45 days to object. Users must submit a sworn statement and agree to U.S. bankruptcy court jurisdiction.
If no objections are made, or if resolved against the creditor, the jurisdiction may be designated as “restricted.” Any associated claim distributions would be forfeited and returned to the FTX Recovery Trust.
FTX will hire local lawyers to assess legality in each region. The proposal has drawn criticism. Some creditors call it unjust and discriminatory. They argue many are excluded based on nationality.
The latest proposal is still pending court approval. The FTX scandal centers on the collapse of one of the world’s largest crypto exchanges in November 2022. Sam Bankman-Fried misused billions in customer funds. He was later convicted on multiple counts of fraud.
