FTX’s International Cryo-Freeze: Creditors in 49 Countries Left Out in the Cold!

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Well, it appears our friends at bankrupt FTX have waltzed into Delaware bankruptcy court, requesting permission to place a theatrical freeze on assets owed to creditors in a dazzling lineup of 49 countries—each with a crypto policy stickier than a summer’s day in Monte Carlo. 🌍❄️

This icy maneuver has sent creditors, notably an impassioned chorus from China, into a predictable tailspin—rumour has it, lawsuits are already being feverishly rehearsed backstage. 🎭

FTX’s Global Deep Freeze: Five Percent, Fifty Shades of Legal Grey

On July 2, FTX decided the world was quite enough trouble as it is, and asked the court to allow them to “hold back” distributions for anyone hailing from these 49 countries where cryptocurrency is about as popular as a bad show tune.

“Today, certain creditors of the FTX Recovery Trust reside in jurisdictions that continue to have laws and regulations that restrict cryptocurrency transactions. The collection of potentially applicable non-US laws and regulations is daunting,” the filing declared—presumably while clutching pearls and fainting onto a legal brief.

FTX’s argument? Oh, the drama! Giving out money where crypto is frowned upon could see them facing not only fines, but the kind of criminal charges that would make even Oscar Wilde raise an eyebrow.

Since many of these countries have legal frameworks as clear as a London fog, the plan is to keep creditors’ assets on ice until lawyers in every jurisdiction have weighed in. FTX calls it a “hold-and-review” structure—one wonders if they serve cocktails while you wait. 🍸

Should their legal oracle find no issues, the funds shall be released, presumably with a flourish and perhaps confetti. But if the legal waters remain muddy, creditors will receive the dubious pleasure of a formal notification, and the courts may be asked to officially brand them as “restricted.” Should the matter remain unresolved, the assets will discreetly swan-dive back into the FTX Recovery Trust’s coffers—curses, foiled again! 🎩

“[If] a Holder of a Claim (whether Disputed or Allowed) is determined by the FTX Recovery Trust to be a resident of a
Restricted Foreign Jurisdiction, then the applicable Distribution and associated interest shall be forfeited,” FTX intoned, with all the warmth of a Victorian governess.

For those creditors keen to make a fuss (who could blame them?), a 45-day window opens—a veritable season of objections and perhaps some very pointed correspondence.

China: Leading the Charge in the Great Payout Farce

A quick roll call of the 49 countries reveals a star-studded cast: China, Russia, Pakistan, Saudi Arabia, Egypt, Iran, Ukraine and more, with claims from these locales comprising a respectable 5% of the creditor pool. China steals the limelight, responsible for 82% of the “frozen” claims—no understudy in sight.

Loyal creditors, particularly those from China, are less than amused. Having waited for funds since 2022, their patience is now thinner than the plot of Act II in a bad pantomime.

The more creative creditors point out that surely one can hold digital assets or receive US dollars in offshore accounts—laws or no laws. By their logic, why bother with such theatrical blockades when the banking world offers so many unseen side doors?

One creditor, operating under the nom de guerre Zhetengji, was positively aghast that the settlement process won’t allow wire transfers to those delightfully discreet offshore accounts. After all, FTX is settling in USD—what sort of melodrama is this?

“The claims process uses USD for settlement. Although foreign exchange controls limit the amount of USD that mainland Chinese residents can receive annually, they are allowed to hold USD overseas. So why isn’t wire transfer settlement supported,” the creditor queried, likely from a smoky drawing room by candlelight.

Others have donned their detective hats, suggesting that FTX intends to use these frozen funds to patch up debts elsewhere, and warned of a forthcoming legal revolt worthy of an entire Barrister’s Ball.

“There’s more than 1000 users I’ve see in WeChat groups that got hurt heavily in FTX scam… If victims in restrict regions unite together, it would force FTX to take the most serious consequences and pay for this fraud,” he stated—an ominous overture for the next act.

One imagines the curtain is nowhere near falling on this delightfully absurd performance. Stay tuned for Act Two. 🎬

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2025-07-05 12:46