Preview: "The FTX estate calls 49 countries “restricted foreign jurisdictions” including China, which accounts for 82% of repayment funds the bankrupt cryptocurrency exchange would hold back."
The estate of bankrupt cryptocurrency exchange FTX is seeking a delay in a Delaware court as it works to respond to over 90 objections challenging its proposed halt to repayments in certain “foreign jurisdictions,” according to a court document reviewed by Cointelegraph.
The “Motion for Leave” would give the FTX estate more time to present its case for halting repayments to creditors in so-called restricted jurisdictions. The document was filed on Sunday, with a hearing scheduled for Tuesday to address the original motion that triggered the legal dispute.
“Given the high volume of Objections received up until and following the Objection Deadline, the FTX Recovery Trust required additional time to draft, finalize, obtain approval of and file the Reply,” the FTX estate wrote.
The estate’s original motion sought to halt repayments to countries that have vague or restrictive crypto laws. By initiating repayments to residents of said countries, the estate argued that it “may trigger fines and penalties, including personal liability for directors and officers, and/or criminal penalties up to and including imprisonment.”
The move affects creditors in 49 countries, with claims totaling $470 million. Chinese residents comprise the largest group, accounting for 82% of claims in so-called restricted countries, or $380 million.
Related: FTX creditors speak on plans, lessons learned as repayments start
Creditors respond to FTX Estate
The FTX estate has faced criticism from some creditors over its efforts to block repayments. Among them is Weiwei Ji, who says they represent hundreds of Chinese creditors in the fight.
“Since this morning, I haven’t taken a single break after seeing FTX’s omnibus reply to our objections,” Ji said on X Monday.
A crypto community member who goes by the name “Mr. Purple” wrote on X that the situation is actually “worse than they think,” adding, “The process, if approved by Judge Owens, is designed to make it highly likely these claims go to $0. Selling *might* avoid the issue but that's not a guarantee.”
According to FTX creditor Sunil Kavuri, there is $1.4 billion in FTX claims still pending some kind of resolution.
The FTX estate began repaying the exchange’s creditors in February, more than two years after filing for bankruptcy in November 2022.
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