FTX's Bold Move to Cut Off Creditors Sparks Fury Among Chinese Users

Hang on to your hats, folks! The drama at the bankrupt exchange FTX just got a whole lot spicier. They're throwing down a proposal that's got some Chinese users up in arms, ready to fight back against being left out in the cold.

On July 8, 2025, FTX creditor Weiwei Ji stormed into the Delaware Bankruptcy Court, not alone but backed by a fierce group of 300 others. They're all ready to rumble against the exchange's latest move.

So, what's the big deal? FTX's bankruptcy estate wants to slam the door on payouts to users in 49 jurisdictions where crypto is either banned or living in legal limbo. And guess what? China, holding more than 80% of the affected claim value, is right in the thick of it, along with Russia, Morocco, North Korea, and others.

If FTX gets its way, creditors in these regions might just get cut off from the cash flow party.

Ji, waving his Chinese passport and claiming Singapore as his tax home, isn't having any of it. He's calling out FTX's move as not just factually off the mark but also legally baseless. He's standing firm, saying there's no way distributing funds to users in China should land anyone in regulatory or criminal hot water.

"The FTX Recovery Trust's attempt to withhold distributions from Chinese creditors based on some wild jurisdictional take on crypto regulation? It's not just unreasonable, it's legally out in left field," Ji fired back. "There's zero credible legal reason to think that paying Chinese creditors would throw the Trust, or any distribution agent, into a regulatory or criminal mess."

He's hammering home the point that FTX claims are all about U.S. dollars, not crypto, and Chinese residents can pocket them just fine through the usual channels, like wire transfers from Hong Kong-based accounts.

To really drive his point home, Ji is diving into the nitty-gritty of crypto's legal status in China.

Crypto holdings, not trading, are 'lawful' under Chinese laws

Sure, retail trading might be on the restricted list, but Ji's making it clear: owning crypto in China? That's still legal, folks. Courts there are nodding along, recognizing assets like Bitcoin and Ethereum as personal property. Heck, a Shanghai Court even backed this up in a 2024 ruling, saying digital assets get protection under civil law.

And let's not forget Hong Kong, which is all in on crypto, operating under its own rules and cheering on regulated digital asset action.

Ji's not just talking; he's bringing receipts. He's pointing to the Celsius bankruptcy, where Chinese users pocketed USD, and the Mt. Gox saga, where Chinese creditors snagged crypto payouts through Kraken. Neither case threw up any jurisdictional roadblocks.

FTX's motion is still under the microscope, with a court showdown set for July 22. Ji's rallying the troops, urging the court to throw out any move that would keep Chinese creditors from getting their rightful slice of the bankruptcy pie.