FTX creditors living in certain parts of the world might want to double-check their country’s name on a new list.
The FTX Recovery Trust has asked the court for permission to introduce a set of procedures that could affect how, or if, claim payouts are distributed in 49 foreign jurisdictions deemed “potentially restricted.”
These include major nations like China, Russia, Ukraine, Pakistan, and Saudi Arabia.
Proposed rules for ‘restricted’ jurisdictions
In a filing submitted Wednesday, the FTX Recovery Trust laid out a framework it wants approved to handle claims in regions where legal compliance for distributions may be uncertain.
According to the filing, around 5% of the estimated $16 billion in claims fall under these jurisdictions, with a staggering 82% of that tied to China alone.
To manage the legal complexity, the Trust wants to hire local counsel to review the feasibility of processing payouts in each area.
If lawyers determine that making distributions in a jurisdiction is legally compliant, the Trust will proceed using a designated service provider.
But if legal clarity can’t be reached, the Trust will file for that region to be officially designated as a “restricted jurisdiction.”
Creditors from that area will have a 45-day window to object before their claims are paused and reclassified as “Disputed.”
If no valid objections are upheld, those funds will be forfeited and returned to the Trust for redistribution.
Court review and community response
A court hearing to review the proposal is set for July 22.
If the motion is approved, the Trust will begin notifying affected users and start the review process for each jurisdiction.
“Distributions that cannot be made due to the illegality of doing so under the laws of a Restricted Foreign Jurisdiction will not be made,” the filing notes.
The Trust also said it may revise the list as legal circumstances evolve.
On X, some creditors are already pushing back. One user on X, claiming to be a Chinese creditor, said, “I will definitely take action and will raise objections at every stage… this is absolutely unreasonable.”
The move follows the recent onboarding of Payoneer as the third payout service for FTX claims, expanding coverage to 93 countries, but clearly not enough for everyone still waiting in the queue.
