FTX Liquidation Leads to Legal Dispute, Chinese Users May Lose Rights to Compensation?

The bankruptcy liquidation of FTX continues to cause waves. On July 4th, the creditor representative Sunli revealed on Twitter that investors from 49 legal jurisdictions may be excluded from the compensation list due to local legal regulations, with most of the compensation claims coming from China. Countries with Restricted Access May Lose Their Rights Sunli stated: In these 49 legal jurisdictions, 5% of compensation claims come from "restricted countries", of which 82% of the claim value belongs to China. The reasons stem from local legal regulations: 1. Cryptocurrency transactions are not permitted; 2. No legal cryptocurrency distributors operate domestically. Therefore, FTX's processing procedure will be: 1. FTX will seek legal consultation; 2. If the legal conclusion determines that distribution to restricted areas is legal, FTX will proceed; 3. If the claimant is determined to reside in a restricted area: - Their claim will be noted as a "disputed claim"; - FTX will file an official objection; - If the dispute is not resolved, creditors will lose their right to compensation. In other words, FTX's liquidation team is consulting legal advice to decide whether to distribute assets to restricted areas. If the answer is no, claims from these areas will be considered disputed and may be canceled, meaning local users will not be able to recover their assets. Although the affected claims only represent 5% of the total approved claims, 82% of these come from China. Since China has not yet fully opened up to private cryptocurrency activities and asset distribution remains restricted, this becomes the largest variable in the entire compensation process. Another hotspot in the creditor list is the compensation claim of $1.53 billion from Three Arrows Capital (3AC). FTX accuses 3AC of causing its own crisis through high-risk trading activities and claims that the requested amount has been severely exaggerated. If the court ultimately approves this claim, the recovery rate for other investors could drop by around 20%. Currently, the total value of disputed claims has exceeded $2.2 billion, increasing the complexity of the liquidation and compensation process.