FTX Seeks Time to Respond as Creditors Fight Freeze on $470M Foreign Claims

FTX estate seeks delay in court

The estate of bankrupt cryptocurrency exchange FTX is requesting a delay in a Delaware court as it works through over 90 objections challenging its proposed freeze on repayments in certain “foreign jurisdictions.” According to a court document reviewed by sources, the “Motion for Leave” would provide the FTX estate with additional time to present its case for halting repayments to creditors in restricted countries.

Issues affecting creditors in 49 countries

The estate's original motion aimed to stop repayments to countries with unclear or restrictive crypto laws, citing potential fines, penalties, and criminal liabilities. This move impacts creditors in 49 countries, with claims totaling $470 million. Chinese residents make up the largest group, accounting for 82% of claims in restricted countries, totaling $380 million.

Criticism from some creditors

FTX estate has faced criticism from certain creditors over its efforts to block repayments. Weiwei Ji, representing hundreds of Chinese creditors, expressed concerns over FTX’s response to objections. Meanwhile, community members like “Mr. Purple” have raised doubts about the process, suggesting that claims could potentially end up being worth $0 if approved by Judge Owens.

Ongoing repayment process

Despite the challenges, FTX estate began repaying the exchange’s creditors in February after filing for bankruptcy in November 2022. With $1.4 billion in FTX claims still unresolved, the estate is working through legal hurdles to ensure a fair distribution of assets to creditors.