FTX Bankruptcy Compensation Plan Launched, Users in Some Countries Face Dilemmas

After more than two years of bankruptcy restructuring, the compensation plan of a well-known cryptocurrency trading platform has finally entered the execution phase. On the 18th of this month, the first round of compensation officially started. According to the established plan, users with claims below fifty thousand dollars will be prioritized to receive cash compensation calculated at approximately 119% based on the cryptocurrency price in November 2022. These users account for 98% of the total, and currently, the first batch of 800 million dollars has been paid to 162,000 accounts, with the remaining funds to be distributed gradually.

However, a piece of news has sparked widespread attention. The creditors' representative stated that users from five countries, including China, Russia, and Ukraine, are unable to participate in the bankruptcy distribution. This decision affects a large number of people and involves a substantial amount of money, with users from mainland China accounting for 8% of the platform's total user base.

There has been no official explanation for the reasons why some could not participate in the allocation. However, from the perspective of legal and financial regulation, the following factors may exist:

1. Jurisdictional Barriers and Compliance Risks: China, Egypt, and Nigeria have adopted a prohibitive regulatory model for virtual assets. These countries view virtual currency-related activities as illegal financial activities that are not protected by law. Providing compensation to users in these countries may contradict local regulatory policies and pose significant compliance risks.

2. International payment restrictions: Major banks in Russia have been removed from the SWIFT system, which has created difficulties for cross-border fund transfers. Even if compensation is made, resolving the issue of fund transfers will be challenging in the short term.

3. Financial Controls During Wartime: Due to the impact of the war, Ukraine has implemented strict financial control policies. Large cross-border remittances and fund flow approvals are at a standstill, which directly hinders compensation to users in Ukraine.

For Chinese users, the situation may be relatively optimistic. In the future, the clearing team may establish special clearing channels with countries that adopt prohibitive regulatory models or consider using stablecoins for online compensation. However, these solutions still face compliance risks and require cooperation and breakthroughs from national and international financial regulatory frameworks.

Currently, the affected users can only wait. Building a special settlement channel takes time and requires coordination and effort from all parties. Although the road is bumpy, there is still a possibility of solving the problem. Regulatory authorities and settlement teams in various countries may continue to explore legal and compliant compensation avenues to protect investors' rights.