FTX Recovery Trust officially makes freeze creditor payments in 49 jurisdictions where cryptographic activity is restricted or prohibited, citing the need for legal confirmation. The move was disclosed in a court filing on July 2nd and affected areas mainly in China, Nigeria, Fiji, Andorra and Zimbabwe.
These jurisdictions account for only 5% of the total allowed claims, but 82% of the frozen value comes from China alone. Local laws in these regions face regulatory uncertainty about whether funds can be legally distributed to residents.
What happens if the user comes from these jurisdictions?
FTX implements a “hold and review” system in which all claims from restricted countries are currently classified as “disputed.” Recovery Trust will only process these claims if legal advice confirms that the distribution does not violate local law. Until then, no funds will be released to these users. Once the court signs the process, each affected creditor receives a “restricted jurisdiction notice.” This document details why creditors are affected and opposes a deadline of at least 45 days.
FTX: Restricted Countries
Disputed claims49 jurisdictions – 82% of China’s value allowing claims in restricted countries
According to local laws, 1) Cryptocurrency trading is not permitted, or 2) Distributors are not permitted pic.twitter.com/wcefaofyad
– Sunil (FTX Creditor Champion) (@sunil_trades) July 3, 2025
The situation has sparked debate among creditors, with some pointing out that users who have moved to crypto-friendly countries still have no access to the claims. FTX creditor supporter Sunil Kavuri said it may be possible to transfer or sell claims to entities in permitted jurisdictions, but it is unclear whether this is a guaranteed modification.
Creditors will retaliate
In response to FTX, Chinese FTX creditor Will has announced that it will take legal action after FTX freezes payments to users of countries like China. He has already contacted a New York lawyer and plans to oppose it at every stage. Will says the move is unfair as people are still allowed to keep crypto and US dollars overseas despite restrictions on crypto trading in China. FTX is resolving USD billing, so I wonder why wire transfers are not allowed. He urges other affected users to remain silent and join him in challenging decisions.
Disputed claims will be reduced
In a positive update, FTX also updated the number, revealing that the total amount of disputed claims fell from $6.5 billion to $4.6 billion. Approximately $1.8 billion in claims previously disputed have been approved, with another $2.7 billion expected to be granted soon. So far, the total amount of approved claims has reached $8.3 billion, providing some relief to creditors waiting for clarity.
Until it is resolved, all affected claims remain disputed, with billions of dollars hanging within legal spheres.