The US Bankruptcy Court in Delaware is reviewing a motion that would prohibit FTX bankruptcy payouts to creditors in 49 restricted jurisdictions, triggering widespread objections and market turbulence. Chinese creditors constitute over 80% of affected claims, representing a dominant share of the impacted parties.
Over 40 formal objections have been lodged before the court, primarily from Chinese creditors. These filings cite violations of due process and inadequate recovery mechanisms, intensifying legal scrutiny of the proposed restrictions.
Market data reveals claims from restricted jurisdictions have depreciated by 20% to 30% following the motion, signaling heightened risk perceptions surrounding asset recovery amid legal uncertainty.
Approximately $1.4 billion in FTX claims remain unresolved under this motion, including $380 million tied to Chinese creditors and $660 million spanning other restricted regions.
Industry experts emphasize the case underscores an urgent need for balanced regulatory frameworks to preserve trust and stability in cryptocurrency insolvency proceedings globally.