Chinese creditors oppose FTX's motion to waive compensation in restricted jurisdictions.

The Block reports: FTX plans to exclude debt allocation to "restricted areas" such as China, and Chinese creditor representatives submit objections.

A Chinese FTX creditor representing more than 300 Chinese users has formally submitted an objection to the U.S. Delaware bankruptcy court, opposing a recent motion by FTX that could exclude creditors from certain countries from eligibility for distribution.

According to previous documents, The Block calculates that FTX is reviewing about $800 million in debts, distributed across 49 jurisdictions that may be classified as "restricted areas," with China accounting for as much as 82%.

Dissatisfied party: Chinese creditors "have fully complied, yet are unfairly excluded"

The objection was submitted by creditor Weiwei Ji, who is also a representative of over 300 Chinese creditors. Although Ji pays taxes in Singapore, due to holding a Chinese passport, FTX classifies him as a "Chinese creditor."

"My family has 4 FTX accounts verified through KYC, with a total claim exceeding 15 million dollars." Ji wrote in the document, "We have fully complied with all procedural requirements as planned, yet this motion threatens our right to allocation in an arbitrary and unfair manner."

FTX Proposal: Countries that cannot comply with the allocation may "waive their claims"

The FTX reconstruction trust fund recently proposed a motion to assess the distributability of debts in 49 potential restricted countries, including China, Russia, Pakistan, and others.

The motion proposes FTX:

Hire local legal experts to assess whether distribution can be legally executed in these countries;

Once it is determined that "compliance cannot be achieved," the region will be marked as a "restricted jurisdiction."

If there are no objections from the court, or if the objections are dismissed, FTX can legally relinquish its debt distribution responsibilities in these regions and transfer them to a trust fund for use in other distributions.

Ji Weiwei: Listing China as a "restricted area" has no legal basis.

"The proposal to classify China as a 'restricted area' lacks factual and legal support," Ji stated.

He pointed out that FTX debts are denominated in US dollars and can be legally distributed to Chinese users through Hong Kong accounts and other means. He also cited relevant cases from Celsius Network as evidence.

In addition, Ji emphasized in the document:

Chinese courts recognize virtual assets as legal property.

Hong Kong has also introduced a supportive regulatory framework for cryptocurrencies.

Such distribution behavior does not pose legal risks and should be regarded as a necessary part of the bankruptcy process.

"Refusing to allocate to Chinese creditors is illegal," he said. "I urge the court to reject this motion that seeks to designate China as a 'restricted area.'"