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Could You Lose Your FTX Claim? Payouts May Be Blocked in These 49 Regions

Published by
Zafar Naik and Qadir AK

If you’re an FTX creditor living in places like China, Russia, or Pakistan, your claim might be at risk. The Trust is tightening its process, and for thousands of people, that could mean delayed payouts – or losing everything.

So what’s behind this sudden freeze? Which countries are on the list? And can affected creditors do anything about it? Let’s break it down.

FTX Locks Claims in ‘Restricted’ Regions

FTX Recovery Trust has filed a new proposal that could stop creditor payouts in 49 countries, including China, Russia, Ukraine, Pakistan, and Saudi Arabia.

If approved, the Trust will freeze distributions in these regions while it checks if payouts are legally allowed. And if they aren’t? Creditors could lose their claims entirely.

These 49 regions are now being considered “Restricted Foreign Jurisdictions.” The trust says it needs to assess whether sending money to these places breaks any local laws. If it does, those payouts won’t happen.

China Hit the Hardest

Out of all affected countries, China is by far the most impacted. According to the filing, 82% of the claim value from restricted regions is tied to Chinese creditors.

That has already sparked backlash online. One Chinese user on X, @zhetengji, wrote: “I will definitely take action and will raise objections at every stage. We can’t just sit and wait – this is absolutely unreasonable.”

Claims Could Be Forfeited if No Objection Is Filed

Here’s how it works: If legal checks show that payouts can’t happen, the Trust will ask the court to mark that country as restricted. Creditors will then have 45 days to object.

If no one objects, or if the court overrules the objections, the claims are marked as disputed and the money goes back to the FTX estate.

“Distributions that cannot be made due to the illegality of doing so… shall revest in the FTX Recovery Trust,” the filing states.

The plan is to hire local lawyers in each region to figure out what’s legally possible.

Court Hearing Set for July 22

A court will review the proposal on July 22. If approved, the Trust will move forward: sending notices, reviewing objections, and beginning the redistribution process.

This new legal step adds another layer of delay for creditors especially those outside the supported regions.

Last month, the Trust added Payoneer as its third official distributor, helping expand reach to 93 jurisdictions. Still, many users say they’ve been left out, despite the updates.

The Recovery is Far From Over

FTX’s collapse has triggered one of the most complex crypto recoveries the industry has seen. And this latest freeze only highlights how tough it is to untangle claims across so many legal systems.

For thousands of creditors in restricted regions, the risk is real: if local laws block payouts, and no one speaks up, their chance of recovery may be gone for good.

FAQs

What exactly happened to the FTX cryptocurrency exchange?

FTX, once a major cryptocurrency exchange, collapsed in November 2022 due to widespread fraud. Its founder, Sam Bankman-Fried, was convicted of stealing billions in customer funds and misusing them to cover losses at his affiliated trading firm, Alameda Research. This led to a “bank run” by customers who couldn’t withdraw their assets, ultimately forcing FTX into Chapter 11 bankruptcy.

Why has the FTX Recovery Trust frozen creditor payouts in certain jurisdictions?

The FTX Recovery Trust has frozen creditor payouts in 49 jurisdictions due to local laws restricting or banning crypto activity. They require legal confirmation that distributions won’t violate these local regulations before releasing funds, to avoid future legal complications.

Zafar Naik and Qadir AK

Zafar is a seasoned crypto and blockchain news writer with four years of experience. Known for accuracy, in-depth analysis, and a clear, engaging style, Zafar actively participates in blockchain communities. Beyond writing, Zafar enjoys trading and exploring the latest trends in the crypto market.

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