China creditors demand non -compliance with payments by FTX

Before the request for FTX To stop payments in restrictive jurisdictions, a group of Chinese creditors presented objections, claiming that the measure is unfair, since they have fulfilled due process.

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• A creditor identified as Weiwei Ji presented a legal objection against the motion of the heritage of FTX.
• JI represents 300 Chinese creditors who would be harmed by FTX.
• He argues that the suspension is arbitrary and that digital assets are legal property in China.

After the reports on possible measures it would take FTX In front of jurisdictions where it would not be possible to process claims with respect to its bankruptcy process, a creditor of Chinese origin presented a formal objection before the court that takes the case.

According to a report published by Cointelegraph, a creditor identified as Weiwei JI presented a formal objection to the United States bankruptcy cut in Delawarein response to a motion that seeks to suspend payments to residents of countries with restrictive laws towards cryptocurrencies.

JI, although currently resides in Singapore, was listed as a Chinese creditor for his passport. Its objection is not only individual, but represents the interests of a growing group of affected, which already exceed the 300 creditors of Chinese nationality.

Legal arguments and fundamentals of objection

The objection presented by JI contains two fundamental arguments. First, he argues that the patrimony payments of FTX They are being carried out in US dollars, a currency widely accepted as a legal means of payment. Second, he points out that in China digital assets such as cryptocurrencies are considered “Personal property”which legally validates them for distribution purposes.

In this regard, in a document presented to the Court, reviewed by Cointelegraph, Ji explains: “My family has four KYC accounts with aggregate claims exceeding USD $ 15,000,000. We have met all the plan requirements. The proposed motion now puts our right to distribution arbitrarily and inequitablely. ”

This argument makes visible the tension between the regulatory restrictions of certain countries and the contractual rights acquired by international creditors.

The difficulties of FTX In certain jurisdictions

On July 2, FTX He presented a motion to pause residents of 49 countries with unclear or restrictive regulations around the use and distribution of cryptocurrencies. The document warns that making distributions in these jurisdictions could lead to severe legal consequences for administrators, including fines, criminal sanctions and even prison.

Moldova was mentioned as an example: there, providing services related to virtual assets can be considered a crime, even if it is a secondary activity.

Other countries mentioned include China, Russia, Egypt, Afghanistan, Tunisia, Zimbabue, Ukraine and again Moldova. In total, it is estimated that about 5 % of the value of the claims approved comes from these jurisdictions.

The motion of the heritage of FTX It represents a dilemma for creditors located in regions with hostile legal frames towards cryptocurrencies. Although many of these people have followed the procedures of the recovery plan to the letter, they could now be excluded from payments simply by their country of origin.

This approach has generated criticism among those affected, who consider that the position of FTX It is excessively cautious and ignores the principle of equity. JI and the group of creditors that represent allege that the motion carefully penalizes them despite having fulfilled all legal and procedural obligations.

What follows for affected creditors?

Although FTX’s motion must still be approved by the Court, the objections presented could influence its final reach. If the court considers that JI’s arguments have merit, it could demand exceptions or adjustments in the distribution policy to avoid arbitrary discrimination.

As the case progresses, more affected international creditors are expected to join the objection or present similar resources. For now, the legal battle around the rights of creditors in restrictive jurisdictions just begins.

Article written by a content editor. Edited by Angel Di Matteo / Diariobitcoin

Original image of Diariobitcoin, created with artificial intelligence, for free use, licensed under public domain

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