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FTX Repayment Blocked in 49 Regions Due to Crypto Restrictions
In a recent development, the FTX Recovery Trust has announced that creditor payouts have been blocked in 49 regions due to local crypto restrictions. The decision was made after considering the legal implications of distributing funds to residents in these areas.
As per the official court filing on July 2, it is clear that the move affects countries with restricted or banned cryptocurrency activities. China, Nigeria, Fiji, Andorra, and Zimbabwe are among the jurisdictions where FTX has frozen all creditor claims.
FTX’s decision comes as a shock to many creditors who were expecting prompt repayments from the exchange. However, the company has explained that it needs legal confirmation before proceeding with any payments in these countries.
The situation has sparked heated debates within the crypto community, with some critics questioning the fairness of withholding payouts solely because users have relocated their claims to countries where cryptocurrency trading is permissible.
FTX Creditor advocate Sunil Kavuri suggests an alternative solution for impacted creditors. He proposes that users may potentially transfer or sell their claims to entities in jurisdictions where FTX can legally distribute funds.
Notably, the blocked repayments come at a time when the total amount of disputed claims has witnessed a significant drop. According to the latest information available, the figure now stands at $4.6 billion, down from an initial $6.5 billion. This decrease indicates that approximately $1.8 billion in previously disputed claims have been approved, while another $2.7 billion is expected to be cleared shortly.
On a positive note, the total value of approved claims has reached $8.3 billion, offering much-needed respite for creditors waiting for clarification.
Until a resolution is reached regarding the 49 restricted jurisdictions, all affected claims will continue to remain disputed.
Source: coinpedia.org
