FTX Chinese creditors face the risk of being deprived of compensation rights

FTX recently proposed a motion for a "restricted jurisdiction," which could prevent creditors from 49 countries, including China, from receiving compensation. Will, one of the major creditors in the FTX China region, stated that there are serious issues with this motion that may deprive Chinese creditors of their legitimate rights.

Will pointed out that the core issue of the motion lies in the fact that FTX appointed a lawyer to provide a legal opinion, which may lack impartiality. If the court approves the motion, the fate of Chinese creditors will no longer be in their own hands.

In this regard, Will is organizing creditors to take action, including writing to the judge to express opposition before July 15, and formally submitting legal objections through American lawyers. He is calling for more creditors to participate in order to protect their rights.

Will believes that there are issues with the legal basis cited by FTX. FTX claims that it is unable to compensate Chinese users due to Chinese regulations, but in reality, the claims have been converted into USD claims, which can be fully compensated through methods such as USD wire transfers.

In addition, Will questioned whether the motion might involve systemic unfairness. Investors who have sold their claims are not affected, while Chinese users who hold the claims directly face the risk of being deprived of their right to compensation, which contradicts the principles of fairness in U.S. bankruptcy law.

Currently, the judge will hear the motion on July 22. If approved, FTX will have 45 days to hire lawyers from various countries to provide legal opinions. Will urges creditors to take active action within a limited time to safeguard their rights.