news 
Title: Over 500 Chinese Creditors Challenge FTX Over $470 Million Payout Freeze
A growing group of over 500 Chinese creditors are now challenging FTX in US court over a proposed $470 million payout freeze, citing concerns around fairness, transparency, and procedural integrity. According to reports, the disgruntled stakeholders have taken to formal legal action, sending letters to the judge and exploring coordinated legal representation.
The issue at hand revolves around a recent motion filed by FTX, seeking permission to withhold approximately $470 million in distributions to creditors in jurisdictions with ambiguous cryptocurrency regulations. China is expected to account for the majority of this sum, with an estimated 82% ($380 million) of the restricted total.
A Chinese creditor named Will, who has retained a US attorney and is part of the growing community, shared his concerns about FTX’s actions: “We were assured that as long as we submitted our claims and supported the reorganization plan in good faith, we would be entitled to receive our distributions alongside other creditors. However, this recent development contravenes those earlier promises.”
FTX has cited the need to avoid legal risk by not sending funds to countries where cryptocurrency use may be restricted, but critics argue that this move could set a dangerous precedent for selective rights stripping of verified claimants after a reorganization plan has already been confirmed.
In conclusion, this controversy highlights the growing rift between FTX and its Chinese creditors.
Source: cryptoslate.com
