FTX withdraws proposal to restrict repayments to certain countries such as China and Russia

Bankrupt crypto exchange FTX has reportedly withdrawn its proposal to introduce the 'Restricted Jurisdiction Procedure' that would have limited creditor repayments in certain countries such as China and Russia.

On the 4th (Korean time), The Block reported that FTX voluntarily withdrew its consent related to the Restricted Jurisdiction Procedure that it had filed with the U.S. Delaware bankruptcy court. The Restricted Jurisdiction Procedure would have reviewed the recoverability of repayments from 49 countries with regulatory constraints and, if deemed infeasible to implement, would have forfeited and redistributed claims from those countries.

Countries including China, Russia, Ukraine, Pakistan, and Saudi Arabia were classified as restricted, and claims on about $800 million in creditors could have been limited. Chinese creditors accounted for 82% of that.

However, it appears the proposal was withdrawn after strong opposition from creditors of Chinese nationality. Creditors argued, "There is no legal or factual basis to designate China as a restricted country."