Weiwei Ji is representing 300 Chinese creditors to oppose FTX’s move to relinquish creditor claims in 49 potentially restricted regions.
What Happened With FTX?
- FTX – A crypto exchange previously led by the infamous Sam Bankman Fried filed for chapter 11 bankruptcy protection in November, 2022.
- This notorious scam, run by the CEO along with top executives, came to light when journalists found that FTX’s value was inflated in the books. While actually illiquid. Derived from a firm called Alameda Research – an affiliated trading platform that dealt in high risk cryptocurrencies.
- According to information available on FTX and Sam Bankman, the fall of the exchange came in quicker when Binance walked out of an acquisition deal after completing their due diligence, and found that FTX was secretly insolvent.
Chinese Creditors Object To Waiving Off Payout in Restricted Jurisdictions
A Chinese creditor is representing 300 other creditors in a move to file an objection to the exchange’s latest motion that may allow it to waive the right for creditors to claim any payouts in certain restricted regions.In a shocking revelation, it was found that FTX has $800 million in creditor claims spanning across 49 potentially restricted regions with China accounting for 82% in total.
Creditor Weiwei Ji has submitted an objection to Delaware Bankruptcy Court according to the filing. FTX ruled out Weiwei as a Chinese citizen despite him being a tax resident of Singapore because he holds a Chinese passport.
Weiwei said,
“My family holds four KYC-verified FTX accounts with aggregate claims exceeding $15 million. We have fully complied with every procedural requirement under the plan. The proposed motion now jeopardizes our right to distribution in an arbitrary and inequitable manner.”
Ji’s objection came in after ‘FTX Recovery Trust’ filed a motion to assess creditor claims in 49 potentially restricted regions including China, Russia and Pakistan.
Is FTX Pulling Another Scam Guised As ‘Legal Assessment’?
FTX Trust hired legal experts in most of these potentially restricted regions to assess the scope of complaint distribution in each jurisdiction. If the experts prove these regions to be unfeasible for complaint distribution then FTX will regard that jurisdiction as restricted.
The creditors can object to these designations put forth by FTX, however in some cases the exchange can forfeit the claim and reallocate it to the trust.
Ji On FTX’s Creditor Claim Process
Weiwei Ji said that the claims of FTX are denominated in USD, making it eligible and feasible for the creditors to receive their payout via Hong Kong-based accounts as it was in the case of Celsius Network.
“Distributing claims to Chinese creditors poses no legal risk to the Trustee or its agents and constitutes a required step under the bankruptcy process, “I respectfully urge the court to reject any designation that would exclude Chinese creditors from distributions.”
Weiwei Ji added further.
FTX customers lost assets worth $8 billion at the time of the scam while its investors lost over a billion in investment. The money laundering scam wiped out the crypto market and many investors around the world lost their confidence in the market as the FTX scam came to light just months after Terra Luna went down. Terra Labs collapsed in May 2022 while FTX went bankrupt in November 2022.
