The upcoming ruling by the US Bankruptcy Court in Delaware regarding FTX's bankruptcy may have significant implications for creditors in restricted countries like China. A motion set for decision could allow the FTX estate to halt payouts to individuals in these jurisdictions, a move that creditor Weiwei Ji warns could create a precedent for future crypto bankruptcies. Ji argues that the designation of countries as 'restricted' could allow any offshore exchange filing in the US to similarly withhold user assets without legal recourse. Since the proposal's filing on July 2, about 40 objections have been made, with many originating from Chinese creditors, who hold 82% of the affected claims. Other countries, like Saudi Arabia, have also objected to the potential discrimination against creditors based on their location. The motion's outcome might impact claim values significantly, already causing a drop in pricing from those jurisdictions. Legal experts indicate that this case could represent a pivotal moment in global digital insolvency practices.

Source šŸ”—