Creditor Holds Back 82% of Repayments in 49 Countries, Affecting Nigeria, Zimbabwe, and Egypt in FTX Debt Case
In a significant move, the FTX Recovery Trust filed a petition on July 2, 2025, with the Delaware bankruptcy court, seeking legal authority to freeze distributions to creditors residing in 49 jurisdictions. This decision could set a significant precedent for how future crypto bankruptcies handle cross-border asset recovery.
The affected claims, which amount to roughly 5% of total allowed claims, have China alone accounting for 82% of the frozen value. Major markets, including China and Nigeria, continue to be excluded from repayment channels.
A 45-day window has been set after notice is served for affected claimants to file objections; failure to do so means automatic forfeiture. Local counsel will assess where payouts can legally proceed across the 49 jurisdictions. A court hearing is expected in July 2025 to decide approval for the restricted-jurisdiction protocol.
FTX has taken a step forward with the introduction of Payoneer as a third repayment channel, effective for distributions after May 30, 2025. This integration allows for repayments in around 93 countries, excluding China, Nigeria, Russia, Egypt, and others.
The freeze on distributions in certain jurisdictions is due to concerns about legal penalties and criminal liabilities for directors and officers. Creditors in frozen regions must either wait for possible legal clearance or formally contest via sworn declarations and acceptance of U.S court jurisdiction.
The ongoing freeze across 49 jurisdictions highlights the inequalities shaping crypto's post-bankruptcy reality. FTX is navigating a legal tightrope, balancing global creditor repayment obligations with the regulatory minefield of crypto bans.
Events to watch include local jurisdiction rulings, creditor legal challenges, and Trust transparency. For deeper insights into the evolving global crypto space, visit our website. Join and interact with our Telegram community for the latest posts and updates, and follow us on X for more.
The freeze on distributions in certain jurisdictions and the introduction of Payoneer signify progress and challenges for FTX. The outcome of this legal battle could have far-reaching implications for the future of crypto bankruptcies and cross-border asset recovery.
