The FTX bankruptcy case continues to unfold with new updates from creditor representative Sunil, who shared significant developments regarding the distribution of claims.
According to Sunil’s recent update on the X platform, judicially restricted claims now total $470 million, with Chinese claimants accounting for a staggering $380 million, over 80% of that restricted amount.
These restrictions primarily stem from international sanctions or local laws that limit or prohibit cryptocurrency activity in specific jurisdictions.
The massive share held by Chinese creditors places them at the center of this legal bottleneck as FTX’s restructuring and repayment process continues.
Total Allowed Claims Expected to Reach $11 Billion Amid Complex Disputes
Beyond restricted jurisdictions, the total amount of allowed claims is now projected to reach approximately $11 billion. However, several categories of claims are still awaiting resolution.
These include $290 million worth of KYC (Know Your Customer) claims tied to users in The Bahamas who failed to complete regulatory checks.
Notably, $660 million in disputed claims due to multiple or conflicting submissions, and $1.4 billion in total claims still under reconciliation.
The FTX Recovery Trust has also noted that about $1.47 billion in claims, once considered allowed, have become disputed, reflecting the fluid and complex nature of the claims assessment process.
Legal Restrictions Threaten Fund Distribution in China and Dozens of Other Nations
The FTX Recovery Trust has flagged legal hurdles in at least 49 countries that could prevent or delay payouts to creditors.
These include China and Russia, where regulatory environments restrict or prohibit crypto-related transactions.
To address this, the trust is preparing to propose “Restricted Jurisdiction Procedures” that would require affected users to prove compliance with local laws before receiving disbursements.
The move has drawn criticism, especially from Chinese creditors who make up the majority of the restricted claims.
With a court hearing scheduled for July 22, tensions are rising over whether Chinese users will be excluded from the eventual compensation process.
FTX Expands Global Repayment Infrastructure With Payoneer Partnership
As part of its Chapter 11 court-approved recovery plan, FTX has announced a new partnership with Payoneer to assist in distributing compensation funds to retail customers worldwide.
The strategic move is aimed at simplifying the payment process for users across various jurisdictions.
However, users who choose to receive their payouts through Payoneer must agree to waive their right to direct cash distributions from FTX itself.
The Payoneer integration represents a key logistical step toward streamlining global reimbursements, particularly in countries where traditional banking infrastructure poses a challenge to crypto-related settlements.
Also Read: Backpack Exchange Enables FTX EU Customers To Withdraw Frozen Euros
Dispute With 3AC Highlights Ongoing Legal and Financial Complexities
In a separate but related legal dispute, FTX has formally rejected a $1.53 billion bankruptcy claim from the liquidators of failed hedge fund Three Arrows Capital (3AC).
FTX argues that 3AC used a $120 million credit line for highly speculative trades and failed to maintain a $240 million margin requirement.
The crypto exchange’s legal team maintains that these actions disqualify 3AC’s claim as credible.
A non-evidentiary hearing is scheduled for August 12, 2025, and 3AC’s liquidators are expected to respond by July 11.
The ongoing legal clash underscores the broader complexities surrounding asset recovery and accountability in the wake of the FTX collapse.
Also Read: Netflix Set to Produce a $32 Million Movie Focused on the Rise and Fall of FTX Crypto Exchange