FTX Freezes Billions: Payouts Blocked in 49 Countries, China Hit Hardest

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FTX Repayment Blocked in 49 Regions Due to Crypto Restrictions

In response to the necessity of obtaining legal clearance, the FTX Recovery Trust has temporarily halted payments to creditors in 49 countries where crypto transactions are limited or forbidden. This decision was made public through a court filing on July 2, and it predominantly impacts regions such as China, Nigeria, Fiji, Andorra, and Zimbabwe.

In just 5% of the world’s jurisdictions, nearly 82% of the blocked funds stem from China specifically. The legal complexities arising from regional regulations make it uncertain whether FTX can lawfully disburse funds to residents in these areas.

What Happens If Users Are From These Jurisdictions?

FTX has established a system where they temporarily halt and scrutinize any claims originating from restricted countries, categorizing them as “disputed.” The Recovery Trust will only handle these claims if it’s confirmed by legal counsel that the distributions won’t breach local regulations. Until such confirmation is received, no funds will be disbursed to these users. Once the court approves this procedure, each affected creditor will receive a “Notice for Restricted Jurisdictions.” This document explains why the creditor is impacted and sets a deadline, at least 45 days, for them to voice any objections.

FTX: Limited Countries with Controversial Status

– Claims from 49 Jurisdictions are partially allowed, representing 5% of total claims.
– Approximately 82% of the value resides in China.

Due to local regulations that either:
1) Prohibit cryptocurrency trading, or
2) Disallow distribution of services.

— Sunil (FTX Creditor Champion) (@sunil_trades) July 3, 2025

The dispute among creditors has been ignited due to some crediting the fact that users who’ve switched to countries accommodating cryptocurrencies are still denied access to their entitlements. Sunil Kavuri, an advocate for FTX creditors, suggests that it could potentially be arranged for these claims to be transferred or sold to entities within acceptable jurisdictions. However, he clarifies that this solution isn’t guaranteed to resolve the issue.

Creditors Retaliate 

As a concerned crypto investor based in China, I’ve decided to take legal action against FTX following their decision to freeze payouts for users like myself in countries such as mine. This move is unjust, considering that while crypto trading may be restricted within China, we are still permitted to hold cryptocurrencies and US dollars abroad. Given that FTX is settling claims in USD, I question why wire transfers aren’t an option. I strongly encourage other affected users to join me in voicing our objections and demanding a fair resolution to this situation. I have already reached out to my New York lawyer for guidance on the best course of action.

Disputed Claims Shrinking

Good news! FTX recently revised its figures, showing that the contested claims have decreased from $6.5 billion to $4.6 billion. That means roughly $1.8 billion in previously contentious claims have been given the green light. Moreover, an additional $2.7 billion is anticipated to be approved soon. As a result, the total value of approved claims now stands at $8.3 billion, providing some comfort for creditors eagerly awaiting resolution.

As long as they’re unresolved, all the impacted claims will continue to be under contention, with billions of dollars stuck in a legal grey area.

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2025-07-04 09:14