FTX Sparks Outrage by Targeting Chinese Creditors in $800M Payout Freeze

On July 2, 2025, FTX, the cryptocurrency exchange dealing with bankruptcy proceedings, filed a motion with the U.S. Bankruptcy Court in Delaware to suspend payouts to creditors in 49 countries with restrictive or unclear cryptocurrency regulations, including China, Russia, Egypt, Afghanistan, Tunisia, Zimbabwe, Ukraine, and Moldova. 

According to court documents available on FTX’s restructuring portal, the exchange references major legal risks, such as potential fines, personal liability for executives, and criminal penalties—such as imprisonment in Moldova, where virtual asset services are illegal. 

The motion affects roughly 5% of FTX’s $8.3 billion in approved claims, valued between $470 million and $800 million, with the highest portion of the value of disputed claims coming from creditors in China in excess of 82%.  

This follows FTX’s repayment process, which began Feb. 18, 2025, for the convenience class, using asset values from its November 2022 collapse. The proposed suspension aims to protect the FTX Recovery Trust from legal exposure but has provoked strong opposition from affected creditors, particularly in China.

Weiwei Ji’s Fight to Secure $15M in FTX Claims

Weiwei Ji, a Singapore-based creditor with a Chinese passport, filed an objection on behalf of 300 to 500 Chinese creditors, challenging FTX’s motion. Ji, holding four KYC-verified accounts with claims exceeding $15 million, argues that FTX’s motion lacks merit and is unjustified. 

The protest, filed in court documents, asserts that both USD settlements and cryptocurrency distributions are approved in China, where digital assets represent personal property under Chinese law. 

Ji asserts full compliance with FTX’s repayment procedures and contends that the exclusion unfairly penalizes compliant creditors due to overly cautious interpretations of Chinese regulations. 

The objection further identifies a core conflict: the exchange’s need to navigate complex global crypto laws versus the rights of compliant creditors. 

The resolution could determine whether Chinese creditors, who hold the majority of the $470 to $800 million in disputed claims, receive payouts or suffer colossal losses.

Clash with International Regulations

FTX’s motion reveals the complexities of cross-border cryptocurrency regulation in bankruptcy cases, affecting claims worth an estimated $400 to $500 million involving China alone. 

The firm’s Recovery Trust has requested court approval for a revised claims process, with a hearing set for July 22, 2025, which could delay or halt these payouts. The decision may change how crypto exchanges manage creditor repayments across jurisdictions with conflicting regulations. 

Critics argue the firm’s broad approach unfairly affects compliant creditors, especially in China, where digital asset ownership is allowed despite transactional restrictions. The case has raised industry discussions about the need for unified global crypto standards.