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FTX Repayment Blocked in 49 Regions Due to Crypto Restrictions
The ongoing FTX repayment process has hit a roadblock in 49 regions worldwide, with the FTX Recovery Trust imposing restrictions on payouts due to unclear legal grounds. The decision is reportedly affecting jurisdictions where crypto activities are either banned or heavily restricted.
According to the latest update from the court filing dated July 2, the recovery trust will only consider processing claims from these regions once legal confirmation has been obtained, ensuring compliance with local laws and regulations. In light of this development, all creditor payouts in the affected countries have been put on hold until further notice.
It is worth noting that China accounts for a significant portion of the frozen funds, with an astonishing 82% of the value of claims originating from this region alone. This situation has sparked debate among creditors, who are finding it difficult to accept the decision.
FTX has introduced a “hold-and-review” system to manage the process, classifying all claims from restricted countries as “disputed.” This means that no funds will be released to these users until the legal issues have been resolved.
Meanwhile, FTX creditor advocate Will’s WeChat account (@zhetengji) announced that he has taken legal action against the decision, stating that it is unfair. According to him, even though crypto trading might be restricted in China and similar countries, citizens are still permitted to hold cryptocurrencies and US dollars overseas. Since FTX is settling claims in USD, he finds it illogical why wire transfers aren’t allowed.
It’s essential to note that the total amount of disputed claims has significantly decreased from $6.5 billion to $4.6 billion as a result of the new policy. Additionally, approximately $1.8 billion worth of previously disputed claims have been approved, and another $2.7 billion is anticipated to be allowed in due course.
For now, all affected claims will continue to remain disputed until the issues are settled.
Source: coinpedia.org
