New Developments in FTX Debt Compensation: Creditors in Regions such as China May Face Loss of Claims Rights

The FTX debt compensation process has encountered new variables. Recently, the creditors' representatives announced the latest compensation timetable and ratios, but at the same time, concerning news has also emerged.

According to reports, creditors from 49 jurisdictions, including China, may lose their right to claim. The claims from creditors in these regions account for 5% of the total, approximately $825 million, of which 82% comes from Chinese creditors, valued at about $676.5 million.

The creditor representative stated that FTX will seek legal advice regarding the distribution to restricted areas. If it is determined that a user belongs to a restricted area, the claim will be disputed. Users have 45 days to raise objections, but if the issue is not resolved, the right to distribution will be forfeited, and their compensation share will be confiscated and returned to the FTX liquidation trust for distribution to legitimate creditors in other areas.

This news has triggered a strong reaction from affected users. Some users have stated that they have contacted lawyers and are calling for action, believing that this practice is unreasonable. Although China does not support cryptocurrency trading, the law recognizes the commodity attributes of virtual currencies, and claims are settled in US dollars.

For Chinese creditors, there are currently several possible solutions:

1. Sell credit rights
2. Assign the debt rights to foreign entities
3. Transfer the creditor's rights in the name of offshore trustees, banks, or other entities
4. Change of residence

Multiple third-party platforms are already offering debt sale services. It is understood that some platforms have successfully handled a large number of cases, assisting in the processing of debt amounts exceeding 300 million USD.

However, for creditors with smaller amounts, the legal route may be too costly. Choosing to sell the debt through a third-party platform, although it entails some loss, can achieve partial capital recovery and may be the better option under the current circumstances.

This event once again highlights the legal risks and regulatory challenges in the cryptocurrency sector. Affected creditors are advised to closely monitor subsequent developments and assess the best response strategies based on their own circumstances.