Chinese creditors have initiated a legal challenge against FTX’s proposed bankruptcy settlement arrangement, formally opposing clauses that exclude payouts to creditors in China. Attorney Weiwei Ji lodged an objection in Delaware Bankruptcy Court representing over 300 Chinese claimants, disputing FTX’s plan to restrict creditor distributions across 49 jurisdictions including China.
The objection contends that Chinese creditors’ cryptocurrency holdings should be legally recognized as distinct assets unrelated to trading activities, citing supporting Chinese judicial determinations including a landmark 2024 ruling. Ji reinforced this stance by referencing prior Celsius Network and Mt. Gox bankruptcy resolutions where Chinese creditors received distributions without jurisdictional payment restrictions.
Hong Kong’s established regulatory framework was presented as a lawful distribution pathway. The Delaware court is expected to review this objection alongside the broader bankruptcy plan, with the outcome potentially influencing treatment of jurisdiction-based limitations in future cryptocurrency insolvency proceedings.