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FTX Freezes $470 Million Overseas Claim, Sparks Major Opposition, Requests Extension to Respond to Creditors
BlockBeats News, July 22nd - According to a court document reviewed by Cointelegraph, the management team of the bankrupt cryptocurrency exchange FTX is seeking an extension in a Delaware court to respond to over 90 objections raised against its proposed "Freeze Partial Foreign Jurisdiction Repayment" approach.
This document, titled "Motion for Leave," was submitted on Sunday, aiming to give the FTX team more time to prepare their argument for why payments to so-called "Restricted Jurisdiction" creditors should be paused. The court has scheduled a hearing for Tuesday regarding the initial motion that sparked the controversy. The FTX management team stated in the motion: "Due to the large volume of objections received around the objection deadline, the FTX Recovery Trust needs additional time to draft, finalize, obtain approval, and submit responses."
The initial motion submitted by the FTX management team sought to halt payments to creditors from countries with unclear crypto laws or restrictive regulations. They argued that making payments to residents of these countries could "trigger fines and penalties, including personal liability for directors and officers, and may even result in criminal penalties, including imprisonment."
This decision will impact creditors from 49 countries, involving a total of $470 million in claims. Among them, Chinese residents make up the largest affected group, accounting for 82% of the total claims from the so-called "Restricted Jurisdictions," amounting to approximately $380 million. The FTX management team's decision to freeze repayments has drawn strong criticism from some creditors. Among them, creditor representative Weiwei Ji stated that they are representing hundreds of Chinese creditors in the protest.
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