China’s creditors affected by FTX’s latest legal operations have stepped up efforts to challenge the demand for bankrupt exchanges to delay payments to users in 49 jurisdictions with restrictive or uncertain cryptography.
The group has looked to US courts and regulators, raising concerns about fairness, transparency and procedural integrity.
Talk to Encryptiona Chinese creditor named Will, who holds US lawyers and is part of a growing community of over 500 Chinese creditors organising responses to FTX decisions.
He revealed that dozens of affected users have already sent formal objections to the bankruptcy court. “So far, 35 people from our group have mailed letters to the judges,” he said in X.
He said Encryption:
“I work closely with a growing group of Chinese creditors, which are currently more than 500 members, many of whom have taken coordinated actions, such as writing letters to judges and US trustees and exploring legal representatives for the group.”
According to him, their frustration centers around a recent FTX motion seeking courts to allow the distribution of $470 million in a distribution to state creditors with ambiguous code rules. China accounts for the majority of this amount, accounting for about 82% of the $380 million claim or limited total.
But it highlighted that:
“$470 million isn’t just cold numbers. Behind them are countless families who have already been hurt once. A second wound is unfolding. We can’t keep quiet.”
Concerns about fairness
On behalf of Chinese creditors, I argue that the FTX move is inconsistent with previous guarantees.
He said Encryption:
“We were clearly said. As long as we submit our claims and vote in favour of the plan, we are entitled to receive distributions just like everyone else. Based on that understanding, we worked together, our claims were confirmed and we sincerely supported the plan of reorganization.”
He argues that this reversal erodes trust in the process. FTX’s new legal move could deny their legitimate compensation because of “nationality or perceived legal uncertainty.”
He said:
“This situation is not only unfair, but procedurally suspicious. The confirmed plans should not be changed in a way that selectively strips certain creditors of rights after the fact. In particular, such changes targeting groups of people deserving close surveillance from the courts deserve careful scrutiny from the courts.”
FTX claims it is trying to avoid legal risks by not sending funds to countries where cryptographic use could be restricted.
However, critics view this as a dangerous precedent that could selectively undermine the rights of verified claimants after the reorganization plan has already been confirmed.
He concluded:
“At the end of the day, this is about not just money, but fairness, reliability and trust in the system. We don’t seek special treatment. We want to be treated equally under the same rules as others.
