FTX\u2019s ongoing bankruptcy saga has hit a new snag, as a group of Chinese users is fighting back against a proposal that could leave them empty-handed.<\/p>\n\n\n\n
On July 8, 2025, FTX creditor Weiwei Ji filed an objection in the Delaware Bankruptcy Court on behalf of himself and about 300 other Chinese users. They\u2019re pushing back against FTX\u2019s plan to potentially block payouts to users in 49 regions where crypto laws are either unclear or outright restrictive.<\/p>\n\n\n\n
China is at the center of this dispute it represents over 80% of the claims value potentially affected by these exclusions. Other countries on the list include Russia, Morocco, North Korea, and more. If the plan goes through, creditors in these regions could be cut out of the distribution process entirely.<\/p>\n\n\n\n
Ji Calls FTX\u2019s Plan \u201cLegally Unfounded\u201d<\/strong><\/p>\n\n\n\n Ji, who holds a Chinese passport but lives in Singapore, says FTX has no legal basis for singling out Chinese creditors. He argues that sending payouts to people in China poses no regulatory or criminal risks.<\/p>\n\n\n\n \u201cThe FTX Recovery Trust\u2019s attempt to withhold distributions from Chinese creditors based on jurisdictional interpretations of crypto regulation is both unreasonable and legally unfounded,\u201d Ji wrote in his court filing. \u201cThere is no credible legal basis to conclude that distributions to Chinese creditors would subject the Trust, or any distribution agent, to regulatory or criminal risk.\u201d<\/p>\n<\/blockquote>\n\n\n\n Ji pointed out that FTX\u2019s creditor claims are settled in U.S. dollars, not crypto, and can be transferred legally to Chinese residents through common financial channels, like Hong Kong bank accounts.<\/p>\n\n\n\n Crypto Ownership Is Legal in China<\/strong><\/p>\n\n\n\n While it\u2019s true that China has cracked down on crypto trading, Ji highlighted an important nuance: owning crypto assets isn\u2019t illegal in China. In fact, courts have repeatedly ruled that digital assets like Bitcoin and Ethereum are considered personal property protected under Chinese law.<\/p>\n\n\n\n He cited a significant ruling from 2024, when a Shanghai court confirmed that crypto holdings fall under civil law protections.<\/p>\n\n\n\n Moreover, Ji stressed that Hong Kong operates under a separate legal system and remains far more crypto-friendly. Hong Kong has actively encouraged regulated digital asset activity and offers a viable route for lawful transactions.<\/p>\n\n\n\n Past Cases Show Chinese Creditors Can Get Paid<\/strong><\/p>\n\n\n\n Ji\u2019s argument also leans on precedent from other major crypto bankruptcies. He referenced the Celsius case, where Chinese creditors successfully received payouts in U.S. dollars, and the Mt. Gox rehabilitation, where Chinese users collected their crypto via the Kraken exchange. In both cases, no restrictions were placed based on the creditors\u2019 jurisdiction.<\/p>\n\n\n\n With a court hearing set for July 22, Ji is urging the Delaware court to reject any blanket rule that would exclude Chinese creditors from getting their share under FTX\u2019s bankruptcy plan.<\/p>\n\n\n\n As the drama unfolds, Chinese creditors and many others will be anxiously waiting to see whether FTX\u2019s proposed exclusions stand or get struck down in court.<\/p>\n\n\n\n <\/p>\n","protected":false},"excerpt":{"rendered":" FTX\u2019s ongoing bankruptcy saga has hit a new snag, as a group of Chinese users is fighting back against a proposal that could leave them empty-handed. On July 8, 2025, FTX creditor Weiwei Ji filed an objection in the Delaware Bankruptcy Court on behalf of himself and about 300 other Chinese users. They\u2019re pushing back…<\/p>\n","protected":false},"author":3,"featured_media":9980,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[63,70],"tags":[227,1398,595],"class_list":["post-9979","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-finance","tag-bankruptcy","tag-chinese-ftx","tag-crypto-exchange"],"yoast_head":"\n\n