Original Article Title: "FTX Creditor Representative Sunil: Chinese Users May Not Get Their Money Back! Majority of Funds Held in Restricted Countries"

Original Article Author: Mickey Hatmouse, BlockTempo

The bankruptcy of the FTX exchange is causing a stir once again. Creditor representative Sunil revealed in a tweet on the 4th that investors from 49 restricted jurisdictions may be excluded from the compensation list due to local regulations, with the majority of the creditor value coming from China.

Restricted Countries Face Disenfranchisement

Sunil stated:

Among the 49 jurisdictions, 5% of the creditors are from "restricted countries," with as much as 82% of the creditor value originating from China.

The reasons are as follows according to local laws:

1. Cryptocurrency trading is not allowed.

2. Cryptocurrency distributors are not allowed to operate domestically.

Therefore, FTX's handling process is as follows:

1. FTX will obtain legal advice;

2. If the legal advice suggests that a distribution can be made to "potentially restricted foreign jurisdictions," FTX will proceed;

3. If a claimant is determined to be a resident of a "restricted foreign jurisdiction":

a. The creditor's claim will be labeled as a "disputed claim";

b. FTX will lodge a formal objection;

c. If the dispute remains unresolved, the creditor will forfeit their distribution rights.

In other words, the FTX liquidation committee is currently seeking legal advice to decide whether to allocate funds to restricted regions. If the answer is negative, the related claims will be marked as disputed and may be invalidated, leaving local users unable to recover their funds.

Although the affected amount represents only 5% of approved claims, 82% is concentrated in China. With China not yet fully opening up private cryptocurrency activities and with restricted fund distribution, this has become the major variable.

3AC Mega-Claim Roils Recovery Rate

Another focal point of the debt table is the $15.3 billion claim made by Three Arrows Capital (3AC). FTX accuses 3AC of triggering a crisis through risky trades, claiming the amount is grossly inflated. If the court ultimately approves it, other investors may only recover approximately 20% less. The current total disputed claims have exceeded $22 billion, adding complexity to the liquidation.

Original Article Link

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