FTX proposes to cancel payments to users from 49 countries

FTX’s liquidation team has filed a plan with the court that proposes a separate payout order for clients from “restricted” countries, including Russia, Ukraine, China, Pakistan and Saudi Arabia. These regions collectively account for only 5% of the reported $16 billion in claims, but 82% of the assets in this category come from China.

Under the proposal, each of the 49 countries would conduct a legal assessment of whether funds could be transferred. If local laws allow it, payments will go through providers like Payoneer. If not, the region will receive a “limited jurisdiction” status and applications will be canceled.

Users from such countries will have 45 days to appeal the decision. If the appeal is denied, the funds will be returned to the bankruptcy estate and redistributed to other creditors. FTX says it is working to reduce the number of “inadmissible” countries.

The reaction from creditors has been harsh, with one of the Chinese victims, under the nickname zhetengji, already announcing his intention to challenge the plan. He called on other users to join the collective resistance.

A hearing on the proposed plan is scheduled for July 22. Earlier, FTX liquidators rejected nearly 400,000 claims for $2.55 billion, sparking a wave of outrage in the community.