The post Chinese FTX creditors file to contest discrimination in amended payout proposal appeared on BitcoinEthereumNews.com.

A Chinese customer of FTX has filed a formal objection in the US Bankruptcy Court for the District of Delaware against the bankrupt exchange’s proposed reorganization plan. In the filing, they alleged discrimination against creditors in “Restricted Jurisdictions.” The creditor, Weiwei Ji, argues that the current payout proposal unfairly blocks users based in China and other regions from receiving distributions despite holding the same legal rights as other FTX creditors. He claims FTX’s approach violates Section 1129(b)(1) of the US Bankruptcy Code by allowing “unfair discrimination” between classes of similarly situated creditors. According to the document, the FTX estate has not provided any statutory authority or factual basis to justify excluding claimants based solely on geography. The filing states that the plan “fails to satisfy the requirements of equal treatment” and lacks any case law supporting the exclusion of lawful customer claims based on residence or citizenship. The creditor also said he is representing nearly 300 Chinese people who are also FTX creditors. They further contend that such exclusions contradict the equitable treatment principle typically applied in cross-border bankruptcies and could set a dangerous precedent for future international insolvency cases. The creditor asks the court to amend the current plan to eliminate jurisdiction-based discrimination or reject it outright. FTX seeks to block creditors in certain regions from payments The lawsuit is in reaction to the latest FTX restructuring proposal, which includes a clause that could stop users in several countries, including China and Russia, from receiving payouts. The language appears in a section of the draft plan describing “Restricted Jurisdictions,” a term used to identify regions where the company says it was not permitted to operate legally. Under the current version of the plan, users in those jurisdictions, even if they submitted valid claims, may be excluded from distributions. The…

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Filed under: News - @ July 10, 2025 1:21 pm