A group of over 500 Chinese creditors has launched a united front against FTX’s decision to freeze a $470 million payout. The creditors are demanding that FTX release the funds, which they claim are essential for their financial survival. The dispute has sparked a heated debate about the future of cryptocurrency trading. FTX’s decision to freeze the payout has been met with resistance from the creditors.
Chinese Firms vs. FTX
The uprising stems from FTX’s 2022 collapse, which left billions in customer funds frozen. The exchange’s bankruptcy proceedings revealed $16.5 billion in claims, with $11 billion allowed. FTX’s Recovery Trust initiated repayments in February 2025, distributing $6.2 billion, with $5 billion disbursed in May.
On July 4, 2025, the crypto exchange’s bankruptcy estate filed a motion to pause payouts in 49 jurisdictions, including China. This affects $470 million in claims, with Chinese creditors holding 82% of the value. Over 500 Chinese users, led by figures like creditor Will, have hired U.S. attorneys to fight their case.
They argue that China’s crypto trading ban does not prohibit holding assets or receiving dollar-based payouts offshore. The group has sent formal objections to the court, seeking to protect their rights.
The Chinese creditors are challenging the crypto exchange’s decision to freeze the payout, citing financial hardship and uncertainty. The creditors claim that the bankrupt exchange’s actions are unfair and have caused them significant economic losses.
Creditors’ Fate Hangs in the Balance
The creditors are concerned that FTX’s actions will have a ripple effect on the entire crypto market. They argue that the payout freeze will lead to financial instability and undermine trust in the market. They are determined to get their money back and are exploring all available options.
The fate of the firms that are yet to be paid remains uncertain. The troubled crypto exchange has already paid out to some firms, including Embed, Voyager, and Galois Capital. However, the payout freeze has left many other firms in limbo. The crypto exchange aims to address the latest development by negotiating with creditors and seeking a mutually beneficial solution.
The firm is working to resolve the issue. FTX’s leadership team is dedicated to finding a solution that benefits all parties involved. The firm’s plans are dependent on resolving the payout issue.
