Interview with FTX China creditor Will: Judge questions the rationale for excluding Chinese users, potentially bringing a turning point; calls for more people to join the action

Interview: Tong, PANews

Editing: Yuliya, PANews

It has been nearly three years since the collapse of FTX, the largest bankruptcy in crypto history. After a long and complex liquidation process, creditors have recently received the third round of payouts totaling approximately $1.6 billion.

However, Chinese creditors remain excluded from this global compensation distribution. Due to regulatory and legal restrictions, they are collectively categorized as being in "restricted regions" and cannot participate in the payout procedure. Restrictive claims held by investors account for over 80% of all restricted assets, making them the largest creditor group by scale.

In the absence of transparency and limited communication channels within the payout process, a group of Chinese creditors began self-organizing. Will (X account @zhetengji) is one such representative who has been pushing since July this year for a motion opposing the classification of "restricted regions," calling on more creditors to join. After months of struggle, this campaign has achieved new progress.

Recently, Will gave an exclusive interview to PANews, detailing key developments in the rights protection campaign, confrontations with the FTX bankruptcy restructuring team, shifts in the judge’s stance, and the hardships and helplessness faced by ordinary creditors attempting self-rescue under a complex system. In this "case of the century," Will's account not only reveals the difficulties ordinary creditors face when navigating a vast and complicated judicial system but also exposes additional pressures caused by procedural opacity, information asymmetry, and third-party institutional involvement.

A few creditors modified KYC to recover funds; most still face information barriers

PANews: Hello Will, thank you for accepting our interview. We understand that there have been recent developments in the FTX case, especially the motion in October. Could you please share some updates? How does it differ from the hearing back in July?

Will: Sure. After the July hearing, we made some progress. At that time, I brought a group of creditors to speak at the hearing, which enabled overseas Chinese creditors to modify their residency information—some successfully recovered their assets. However, many of those who benefited have since chosen to withdraw.

The October hearing made me realize two things:

Strength in numbers: Judge Owens now places great importance on collective creditor opinions.

Information gaps remain massive: Very few Chinese creditors are aware of these critical developments. The earliest disclosed data indicated Chinese creditors accounted for 8%, later revised down to 4%. Even using this conservative estimate, it involves thousands or even tens of thousands of users. Yet currently, our维权 group only has about a thousand members, with even fewer active participants—meaning a large number of affected individuals remain isolated in information silos. That’s why I proactively reached out to you, hoping to raise awareness of the real situation and encourage more people to join our rights protection efforts.

PANews: You mentioned that after the July motion, some overseas Chinese creditors resolved their issues. What were their main demands? You yourself successfully recovered part of your funds—how exactly did you do it?

Will: These creditors were actually overseas residents holding Chinese passports. Under U.S. bankruptcy law, jurisdiction is determined by residence, not passport nationality. During the July 22 hearing, the judge received numerous letters from Chinese creditors residing abroad and questioned FTX Trust: Why can't these individuals reclaim their assets? He then demanded that FTX Trust provide a corresponding modification process.

At the time, however, FTX did not offer a clear process. After the hearing, we tried contacting customer service via email, but each agent gave inconsistent responses. Leveraging our collective strength, I compiled and summarized fragmented information shared among us and, prior to the August 15 asset snapshot round, formulated what I believed was a viable modification process. This process was quite complex and involved multiple steps:

• KYC address update: Contact FTX support via email and submit proof of residence, such as utility bills or long-term visas.

• Tax form information update.

• Update details with associated custodians (e.g., BitGo, Kraken).

I had several FTX accounts. One registered under my personal name succeeded because I live in Singapore and followed this process to update my information and successfully recovered part of my assets. Others who followed my guidance and actively spoke up during the previous round were mostly compensated—I believe FTX prioritized resolving difficult cases first.

FTX Trust holds the "final say"—transparency of payout procedures remains questionable

PANews: You mentioned other accounts failed to receive payouts, like your wife’s account, which clearly met the criteria. Why did it fail? Does this reflect flaws in the compensation process?

Will: This is precisely the core issue—the process lacks transparency. My wife lives with me in Singapore, and her account information was updated, yet she still did not receive any payout in the September 30 distribution due to the larger amount involved.

We later discovered that FTX Trust holds a powerful tool: Until January 3, 2026, they have the right to flag any account as “disputed” without providing any explanation. This authority was granted through a court motion two years ago, before we became involved. Their justification to the court was that the FTX case is historically large, with a limited team needing more time. As a result, extreme situations arise—accounts may be arbitrarily marked as disputed, leaving users unable to access funds while the Trust owes no explanation.

PANews: Then, what exactly is this FTX Recovery Trust that holds such immense decision-making power?

Will: The FTX Recovery Trust primarily consists of the team handling the bankruptcy restructuring of former FTX assets and entities. But there's something deeply unreasonable: Most of the lawyers on the team were originally FTX’s own legal counsel. In other words, the very people responsible for user registration and agreement signing are now leading the bankruptcy proceedings. Such a scenario—where the same team handles wrongdoing committed by the original entity—is extremely rare in major bankruptcy cases.

More seriously, the U.S. Department of Justice (DOJ) typically appoints independent investigators in large bankruptcies, but none were assigned in the FTX case. Early on, the U.S. Trustee proposed appointing an independent investigator, but the presiding judge rejected it, citing concerns over delaying the bankruptcy process. This lack of external oversight further increases procedural opacity.

Judge questions validity of restricted country list—payout adjustments may be imminent

PANews: We noticed the judge has changed to Judge Owens. How would you describe his attitude? Does he seem more attentive to the plight of Chinese creditors?

Will: Yes, Judge Owens’ attitude gives us hope. After several hearings, I’ve sensed he truly values public opinion and creditor voices. A significant shift occurred during the October hearing when he raised key questions:

He challenged FTX Trust: “Why can other cryptocurrency bankruptcies (like BlockFi, Celsius) compensate Chinese creditors smoothly, yet you require court approval for a process that allows non-payment or even confiscation?”

He cited examples where even Iranian creditors received compensation—why not China?

He adopted arguments from my earlier motion, noting that “crypto regulation changes month by month,” questioning whether establishing a rigid process now might conflict with future legislation.

Compared to the July hearing, when the judge merely found FTX’s motion lacked executable details (unclear timelines, unjustified asset seizure), and asked for revisions, Owens’ questions this time were far deeper and more aligned with creditor interests.

PANews: So what was the final outcome of the October 23 hearing? What ruling did the judge make? What should we expect next?

Will: The result was highly favorable to us. Judge Owens ultimately required FTX Trust to withdraw its motion. His exact words were: “Not formally denied on paper, but go back and rethink deeply,” specifically urging reconsideration of the “list of potentially restricted countries.” I interpret this as implying they must reassess whether China should remain on that list.

Thus, two possible paths lie ahead:

Best-case scenario: FTX Trust adopts the judge’s suggestion, revises the plan, removes China from the restricted list, and enables all Chinese creditors to receive compensation.

Continued delay: If they only make minor changes and resubmit a similar motion, we’ll need to continue fighting.

Attempts to silence creditors; third-party firms buying claims create panic

PANews: Just before the October 23 hearing, dramatic events unfolded—FTX Trust suddenly submitted a revised motion and even attempted to ban your speech. What exactly happened?

Will: The FTX Trust team is extremely arrogant. From July to October, they never communicated with us. Only days before the hearing did they hastily file a so-called “revised” motion, giving us just one day to respond—an obvious attempt to catch us off guard.

Even worse, the new motion contained extensive sections requesting the court to prohibit me from speaking. Reasons included:

• I filed nine motions over the past three months, allegedly delaying the bankruptcy process;

• Since I’ve already recovered my personal claim, I supposedly lack standing to speak;

• I cannot represent my wife’s or company accounts due to missing marriage documentation or because corporate accounts require professional legal representation.

For a bankrupt entity to dedicate substantial space in a legal filing to restrict a single creditor’s speech is itself highly unprofessional and disgraceful.

PANews: You noted that Chinese creditors account for over 82% of total assets in restricted regions—a staggering figure. Why did FTX designate China as a restricted region? What might be the underlying reasons?

Will: According to data disclosed by FTX in its July motion, Chinese creditors hold 83.8% of the $400–500 million in assets across “potentially restricted jurisdictions.”

As for motives, while not publicly stated in court, widespread speculation suggests that John J. Ray III, FTX’s bankruptcy restructuring lead, is evaluated based on asset recovery ratios. If the massive pool of Chinese-held assets is confiscated and redistributed to other creditors, the overall payout ratio increases, enhancing his professional record.

Additionally, hedge funds and debt collection firms are aggressively acquiring claims. Whether these institutions have ties to the bankruptcy team is unknown, but logically, the more money left in the pool, the greater their profit margin.

PANews: You also mentioned these third parties create panic when buying claims. How does this market operate? Are ordinary creditors forced to sell their claims?

Will: Selling claims is indeed an option—but the worst one. These acquisition firms manufacture fear (via partnered KOLs publishing sensational reports) to drive down claim prices. For instance, they may buy claims at around 110%, while eventual payouts could reach 170%, creating huge arbitrage opportunities.

PANews: Is asset distribution in the FTX bankruptcy fair? What are current payout rates?

Will: Asset distribution remains highly controversial. The FTX bankruptcy team sold certain assets—such as stakes in AI companies and Solana holdings—at market lows (e.g., during the November 2022 FTX collapse). This led to cryptocurrency-denominated claims being calculated at low USD valuations—for example, Bitcoin valued at $16,000—leading many to view the process as unfair.

PANews: In future distributions, are there priority tiers? Will employee and shareholder claims take precedence over ordinary creditors?

Will: Yes, employee salaries and supplier debts come first; ordinary creditors are lower in priority. Assets held by employees on the platform will also be compensated earlier. Shareholders and investment firms rank even further behind.

PANews: How did FTX Trust lawyers behave during the hearing?

Will: They maintain a polite demeanor in court, relying heavily on playing the victim. They repeatedly emphasize the case’s complexity and workload to gain judicial sympathy. When asked why other bankruptcies don’t require such processes, they vaguely reply “FTX is different” without specifying actual differences. They even argue that creditor opposition stems solely from eagerness to recover funds—yet privately, account statuses can be easily changed via email, exposing once again the lack of transparency.

Self-funding legal costs to avoid conflicts; urges domestic creditors to follow latest developments

PANews: We understand you’ve invested significant effort into this campaign, including high U.S. legal fees. Why not accept donations from others?

Will: Legal fees are indeed expensive—I spent $60,000 on my last motion. But I insist on covering all costs personally. The reason is simple: Accepting donations could raise questions about my position and motives, which FTX Trust could exploit to attack me, weakening my stance. Therefore, I clearly stated in the group that I won’t accept any financial contributions.

This includes the recent hearing. Although the judge suggested in July that FTX Trust provide translation services, they ignored it until the eve of the hearing. We prepared independently—I interviewed and hired a U.S. court-certified interpreter, paying the cost myself.

PANews: Finally, what message would you like to send to Chinese creditors who are still unaware of the situation?

Will: Above all, I want those lacking sufficient information to either join us or at least follow my Twitter (@zhetengji) to stay informed about real developments.

Personally, I’m not worried—I fully have the means to convert all my accounts into overseas ones. But I’d rather help ordinary domestic creditors. Some in the group say that $30,000–$40,000 represents their entire life savings. Asking them to spend $10,000–$20,000 on immigration just to recover the rest isn’t realistic. I see many living in extremely difficult conditions. While I still have the energy and ability, I hope to help them resolve this sooner rather than later.