The FTX Recovery Trust submitted a motion requesting the court to authorize the estate to implement new measures to distribute creditor claims in restricted jurisdictions overseas.
The trust has identified 49 potentially restricted foreign jurisdictions, which include China, Russia, Ukraine, Pakistan and Saudi Arabia, according to the Wednesday filing.
The claims in the 49 jurisdictions represent 5% of the estimated $16 billion in potential claims. Moreover, 82% of the value in potentially restricted regions are in China, the filing added.
The filing said the proposed “Restricted Jurisdiction Procedures” filing aims to hire local attorneys to assess whether distributions are possible in the respective jurisdictions in a compliant manner.
If compliance is confirmed after legal assessment, the trust said it will proceed with the distribution via distribution service providers. In the case compliance is not guaranteed, the trust will notify the affected creditors and seek court order to designate the region as a restricted jurisdiction. Creditors will have 45 days to object, the filing said.
If no objections are filed, or if objections are overruled, distributions to creditors in restricted jurisdictions will be forfeited and reverted to the trust for redistribution. Claims in these jurisdictions will be treated as Disputed Claims until resolved.
“Distributions that cannot be made due to the illegality of doing so under the laws of a Restricted Foreign Jurisdiction will not be made and any interest in such Distribution shall revest in the FTX Recovery Trust,” the filing said. “The FTX Recovery Trust continues to make efforts to reduce the number of countries on this list of jurisdictions and may remove jurisdictions if the legal situation is clarified.”
A court hearing for the proposal is scheduled for July 22. If approved, the FTX Trust will engage attorneys, issue notices, and resolve objections, while continuing to process claims.
“I will definitely take action and will raise objections at every stage,” X user @zhetengji, an FTX creditor likely based in China, wrote Thursday. “I also hope more people will step up. We can’t just sit and wait—this is absolutely unreasonable.”
Last month, the FTX Recovery Trust added Payoneer as the third distributor to assist creditors across 93 jurisdictions. However, some users on social media platform X expressed frustration as their respective countries still fell outside the coverage despite the addition of Payoneer.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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