FTX may not process payments in 49 jurisdictions due to legal inconveniences

The recovery trust of FTX proposes a procedure to classify as “Restricted jurisdictions” To countries where local laws prevent reimbursements. China, Russia and Saudi Arabia among the most affected.

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• FTX He identified 49 countries with possible legal restrictions to distribute reimbursements to creditors.
  
• If the jurisdictions do not meet the legal requirements, the claims will be annulled.
  
• China represents 82% of the total value affected by restrictions.

He FTX Recovery Trustentity responsible for managing the bankruptcy process of the Exchange Ftx, This week presented a motion before the Court to implement a procedure that allows you to manage the claims of creditors in countries where local laws hinder fund transfers.

According to the document presented on Wednesday, reviewed by The block, The trust has identified 49 foreign jurisdictions with possible legal restrictions. Among them are China, Russia, Ukraine, Pakistan and Saudi Arabia. These regions represent approximately 5% of USD $ 16,000 million in potential claims.

The proposal seeks to establish a legal mechanism to evaluate, together with local lawyers, if it is legally possible to make distributions in these countries. If it is determined that it is not viable, the funds assigned to these claims will be reversed to the trust.

China concentrates most of the affected value

Although they only represent a fraction of the total creditors, the financial impact on these regions is not less. 82% of the value of claims in potential restricted jurisdictions comes from China, according to the trust in the judicial presentation.

This percentage highlights the magnitude of the problem and the legal challenge facing the recovery team, especially when it comes to countries with strict regulations or financial policies closed abroad.

The trust clarified that the distributions that cannot be carried out by illegality under local laws “They will not be carried out”and interest in these distributions “It will return to the FTX Recovery Trust.”

Procedure and consequences for creditors

The Plan stipulates that, if after the legal review it is not possible to comply with the local regulations, the creditors of these regions will receive an official notification and the trust will request the Court formally designating them as “Restricted jurisdictions.”

Then, The creditors will have a period of 45 days to present objections before the Court. If they do not, or if their objections are rejected, their distribution rights will be canceled. Meanwhile, their claims will be classified as “Dispute Claims”which implies a status pending resolution.

This approach seeks to give transparency to the process, although it has generated disagreement among some affected.

User reactions and next legal steps

One of the creditors, identified as @zhetengji In the social network X and presumably resident in China, he expressed his discontent with the measure: “I will definitely take action and present objections at each stage. We cannot stay with crossed arms. This is absolutely unreasonable”.

It is not the first time that the trust faces complaints. In June, he incorporated the company Payoneer as the third distribution provider, with coverage in 93 jurisdictions. However, numerous users criticized that their countries are not yet contemplated, despite this expansion.

The court has scheduled a hearing to discuss the proposal on July 22. If approved, the trust will hire local lawyers, will notify the affected creditors, and begin to process objections while continuing with the rest of the distributions.

He FTX Recovery Trust He emphasized that his intention is to reduce the number of restricted jurisdictions “To the extent that the legal situation in each country is clarified”. But for now, uncertainty remains high for thousands of creditors who hope to recover part of their lost funds.

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

Original image of Unspash, edited with Canva

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