Original | Odaily (@OdailyChina）
Author | Golem (@web3_golem）
On July 1, FTX creditor representative Sunil updated the compensation situation:
On February 18, 2025, users with amounts less than $50,000 will receive 120% compensation;
On May 30, 2025, users with amounts over $50,000 will receive 72.5% compensation, while users with amounts less than $50,000 will receive 120% compensation;
The expected compensation distribution times are October and December 2026, and 2027;
Users with amounts over $50,000 who have received 72.5% compensation will subsequently receive 27.5% face value compensation, achieving 100% compensation. (Note: Based on compensation conditions, FTX creditors can expect an interest rate of approximately 40-80% after filing for compensation.)
Just as creditors were preparing to wait for their compensation, FTX's creditor claims took an unexpected turn.
On July 4, FTX creditor representative Sunil posted on X platform that creditors from 49 judicial jurisdictions, including China, may lose their claim rights. The claim funds from these regions account for 5% of total funds, approximately $825 million (based on total compensation assets of $16.5 billion), with 82% belonging to Chinese creditors, representing claim assets worth about $676.5 million.
List of potentially restricted judicial jurisdictions
Sunil also stated that FTX will seek legal advice for distribution to restricted foreign jurisdictions. However, if a user is confirmed to be from a restricted foreign jurisdiction, the claim will be controversial. Users will have 45 days to raise objections, but if the issue remains unresolved, they will completely lose their distribution rights, and their compensation share will be confiscated and returned to the FTX liquidation trust for distribution to creditors from other legally recognized countries and regions.
In fact, when FTX officially began compensating users with amounts less than $50,000 on February 18, it indicated that five regions - China, Russia, Egypt, Nigeria, and Ukraine - were temporarily unable to participate in claim distribution, with Chinese users being the most numerous, accounting for 8% of total FTX users.
Victims might have previously thought that claim restrictions by judicial region were temporary, hoping FTX would propose a solution. However, today's announcement expanded the restricted regions and almost pronounced a death sentence on the claim rights of creditors from restricted areas.
Regarding FTX's approach, the anger of victims could no longer be contained. User @zhetengji stated they have contacted a lawyer in New York and called for more people to take action:
I will definitely take action and raise objections at every stage. I hope more people will stand up. We cannot just sit and wait - this is absolutely unreasonable. Although mainland China does not support cryptocurrency trading, mainland Chinese residents are allowed to hold cryptocurrencies. The law recognizes the commodity attributes of virtual currencies. The claim process uses US dollars for settlement. Despite foreign exchange controls limiting the amount of US dollars mainland Chinese residents can receive annually, they are allowed to hold US dollars overseas.
How Should Chinese Creditors Pursue Their Claims?
Legal action must consider costs and benefits. For large creditors who suffered losses of tens or hundreds of millions of dollars on FTX, the cost and benefit of legal action might be equivalent. However, for users with amounts less than $50,000, the claim funds would be disproportionate to the legal costs, time, and effort.
So, should they just watch their money flow into others' pockets? Of course not. In fact, many third-party platforms already offer debt claim sale services for FTX creditors, such as RootData, claims market, ftxcreditor, and Xclaim. To better understand how FTX Chinese creditors can "pursue their claims," Odaily consulted RootData's FTX Claim Solution Manager Loners Liu:
RootData primarily operates as a financing information platform and provides FTX claim sale services for Chinese users. They have successfully handled over 1,000 cases, assisting with claim amounts exceeding $300 million. Loners Liu stated: "You can think of us like a real estate agency. We help Chinese creditors sell their claims at a discounted price or help them manage their claims."
RootData currently charges a 1-2% service fee for this service, with four main solutions to help Chinese users handle FTX claims:
Selling claims;
Transferring claims to entities owned outside China;
Transferring claims under the name of trustees, banks, or other entities outside China;
Changing residence;
To sell claims, users first need to log in to claims.ftx.com to confirm KYC, then both buyer and seller need to schedule a video meeting, log in to the backend to verify and sign the contract, and finally complete the transfer.
"Previously, people were hesitant about actively managing their claims, but after news of claim restrictions for Chinese users spread in the past few days, many have come to consult," Loners Liu said while answering my questions and responding to messages from creditors.
"However, we estimate that among Chinese creditors, only around 1,000 users might have amounts exceeding $50,000," Loners Liu noted that many large clients have already handled their claims through various channels.
From the perspective of affected users, waiting for years without receiving money is like a bolt from the blue. The creditor representative's 45-day appeal period and cross-border claim rights, combined with their frustratingly inefficient processes, deliver another blow. At this moment, being able to recover a portion of funds by accepting some loss (claim transfer rate plus a small service fee) might be the best option available.
Strictly pursuing legal rights against a bankruptcy lawyer group that charges astronomical fees and controls the rules would leave Chinese creditors with little leverage. In the ever-changing crypto world, the FTX collapse seems distant, but the scars remain unhealed for all parties involved. The most painful sight is seeing the cryptocurrency that once carried wealth dreams ultimately transformed into dollars entering the lawyers' pockets.
