On July 22, the management team of the insolvent cryptocurrency exchange FTX filed a formal request in the Delaware State Court seeking an extension to address over 90 objections related to their proposal to freeze repayments in specific foreign jurisdictions. The motion, titled “Motion for Leave,” was submitted to allow additional time for the FTX Recovery Trust to prepare a comprehensive response to creditor concerns regarding the suspension of payments in countries with ambiguous or restrictive crypto regulations. A hearing on this motion is scheduled for Tuesday, highlighting the ongoing legal complexities surrounding FTX’s bankruptcy proceedings.
The FTX management emphasized that disbursing funds to creditors in these “restricted jurisdictions” could expose directors and executives to significant legal risks, including fines, personal liability, and potential criminal charges. This freeze impacts creditors across 49 countries, with claims totaling approximately $470 million. Notably, Chinese creditors represent the majority, holding claims worth around $380 million, or 82% of the affected total. The move has sparked notable opposition, with representatives like Weiwei Ji advocating for the rights of hundreds of Chinese claimants.