While FTX continues its global payout efforts, the crypto exchange’s recovery just hit a major snag. The company’s Recovery Trust has frozen approximately $470 million in payments across 49 “Restricted Foreign Jurisdictions,” leaving countless users wondering when – or if – they’ll ever see their money again.
China’s taking the biggest hit, with a whopping $380 million in suspended claims. That’s 82% of all frozen funds, though Chinese users represent just a small fraction of total FTX claimants. This financial crisis stems from the November 2022 collapse of FTX. The Trust aims for cash-equivalent disbursements to protect creditors from crypto volatility. Talk about unfortunate timing – this disruption comes right in the middle of FTX’s $5 billion second payout round that kicked off in May 2025.
China bears brunt of FTX freeze with $380M suspended, as exchange struggles through $5B payout amid regulatory hurdles.
The reason? Legal headaches. Lots of them. FTX executives are desperately trying to avoid getting slapped with fines or criminal charges in countries where crypto regulations are either hostile or murky at best. The list reads like a who’s who of strict crypto regulators, spanning major nations across Asia, Africa, and the Middle East.
For users in non-restricted areas, it’s business as usual. They’re getting paid through platforms like Kraken, BitGo, and Payoneer – all in stablecoins, based on November 2022 values. But if you’re in one of those 49 restricted countries? Sorry, you’re stuck in legal limbo.
The Recovery Trust isn’t completely closing the door, though. They’re asking the court for permission to create special payout mechanisms for these jurisdictions. But if that fails, affected creditors will need to roll up their sleeves and prepare for a long legal battle. They’ll have to file formal objections and possibly spend years fighting through the courts.
Meanwhile, FTX managed to set aside $1.9 billion for creditors in “friendly” jurisdictions, thanks to a court-approved reserve reduction. But for those caught in restricted territories, their claims are now tagged as “contested” – a polite way of saying “don’t hold your breath.” The crypto world’s recovery story just got a lot more complicated.
