Dialogue with FTX China creditor Will: The judge questioned the reasonableness of excluding Chinese users, which may bring a turning point, urging more people to join the action

Interview: Tong, PANews

Editor: Yuliya, PANews

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

However, in this global compensation distribution, Chinese creditors are still excluded. Due to regulatory and legal restrictions, they are classified as “Restricted Regions” and cannot participate in the payout process. The restricted claims held by investors account for over 80% of all restricted assets, making them the largest group of creditors.

Amid the long-standing lack of transparency and limited communication channels in the payout process, a group of Chinese creditors began to organize spontaneously. Will (X account @zhetengji) is among their representatives. Since July this year, he has been advocating against the classification of “Restricted Regions” and calling for more creditors to join. After months of effort, this movement has recently made new progress.

Recently, Will gave an exclusive interview to PANews, revealing key developments in the rights protection efforts, details of confrontations with the FTX bankruptcy restructuring team, changes in the judge’s attitude, and the hardships and helplessness faced by ordinary creditors trying to self-rescue within a complex system. In this “century case,” Will’s account not only highlights the difficulties faced by ordinary creditors under a large and complicated judicial system but also exposes issues such as lack of transparency, information asymmetry, and additional pressure caused by third-party institutions’ involvement.

A small number of creditors have modified KYC to recover funds, but most still face information barriers

PANews: Hello Will, thank you for accepting our interview. We understand there have been recent developments in the FTX case, especially the motion in October. Could you first share some of the latest updates? How does it compare to the hearing in July?

Will: Sure. After the July hearing, we made some progress. I went with a group of creditors to speak at the hearing, which led to overseas Chinese creditors being able to modify their residence information, and some successfully recovered assets. However, many of those who received payouts chose to withdraw afterward.

The October hearing made me realize two things:

• The power of collective action: Judge Owens now pays great attention to the collective opinions of creditors.
• Information gap remains huge: Very few Chinese creditors are aware of these key developments. The earliest data disclosed by FTX indicated Chinese creditors accounted for 8%, later revised to 4%. Even with a conservative estimate of 4%, this involves thousands or even tens of thousands of users. But currently, our rights protection group has only about a thousand members, with even fewer active participants. This means many victims are still in information silos. So, I proactively contacted you hoping to let more people see the real situation and 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 at that time? You also successfully recovered some funds—how did you do it?

Will: These creditors are mainly overseas residents holding Chinese passports. Under U.S. bankruptcy law, jurisdiction is determined by residence rather than passport nationality. At the July 22 hearing, the judge received numerous letters from Chinese creditors living abroad, questioning FTX Trust: why these people can’t recover assets, and demanding they provide a process for modification.

At that time, FTX did not provide a clear process. Afterwards, we tried contacting customer support via email, but each representative gave inconsistent answers. Leveraging our numbers, I compiled the fragmented information we received and, before the August 15 asset snapshot, summarized a feasible modification process. This process was quite complex, involving multiple steps:

• Modify KYC address: Contact FTX support via email, submit proof of residence such as utility bills or long-term visas.
• Modify tax form information.
• Modify details with custodians like BitGo, Kraken.

I have several FTX accounts myself, including one opened in my name. Since I live in Singapore, I followed this process successfully and recovered some assets. The group of “troublemakers” who followed my lead and actively spoke out also received payouts, which I believe FTX did to resolve issues quickly.

FTX Trust holds the “Supreme Power,” raising doubts about payout transparency

PANews: You mentioned other accounts, like your wife’s, that did not receive payouts despite meeting the conditions. Why did that happen? Does this indicate problems with the payout process?

Will: That’s the core issue—the process is extremely opaque. My wife and I live together in Singapore; her account information was also modified, but because the amount was large, she still did not receive a payout in the September 30 distribution.

We later discovered that FTX Trust holds a “supreme power”: before January 3, 2026, they have the authority to mark any account as “disputed” without providing any explanation. This authority was granted through court motions two years before our involvement. Their justification to the court was that the FTX case is the largest in history, and due to the massive scale and limited team, more time was needed. As a result, extreme situations can occur: accounts may be arbitrarily flagged as disputed, and users cannot access their funds, while Trust does not need to explain why.

PANews: So, what exactly is the FTX Recovery Trust? What institution is it?

Will: The FTX Recovery Trust is mainly the bankruptcy restructuring team that took over the original FTX assets and entities. But there’s a serious issue: most of the lawyers involved are actually the original FTX lawyers. That is, those who handled user registration and signed agreements are now leading the bankruptcy restructuring. Having the same team handle the original illegal activities of the entity is extremely rare in large bankruptcy cases.

Even more concerning, the U.S. Department of Justice (DOJ) usually assigns independent investigators in major bankruptcy cases, but there are none in the FTX case. Early on, the U.S. Trustee proposed appointing independent investigators, but the judge rejected it, citing “impact on the bankruptcy process.” This lack of third-party oversight at the regulatory level increases the opacity of the proceedings.

The judge questions the legitimacy of the restricted country list; payout adjustments may be upcoming

PANews: We noticed the judge has been replaced by Judge Owens. How do you view his attitude? Does he seem more concerned about the plight of Chinese creditors?

Will: Yes, Judge Owens gives us hope. After several hearings, I feel he values public opinion and the voices of creditors. A key shift was in the October hearing, where he raised several important questions:

• He asked FTX Trust: “Why can other crypto bankruptcy cases (like BlockFi, Celsius) pay Chinese creditors smoothly, but you need a court to grant you a process that allows non-payment or confiscation?”
• He cited an example where even Iranian creditors received compensation—why not Chinese?
• He adopted some of my previous proposals, pointing out that “cryptocurrency regulation changes monthly,” and questioned whether it’s premature for FTX to establish a rigid process now, which might conflict with future laws.

Compared to the July hearing, when the judge only said FTX’s motion lacked actionable details (such as unclear timelines and unreasonable direct asset confiscation), Owens’s questions are much deeper and more creditor-centric.

PANews: What was the final outcome of the October 23 hearing? How did the judge rule? What should we expect next?

Will: The outcome was very favorable for us. Judge Owens ultimately asked FTX Trust to withdraw the motion. His words were, “It’s not dismissed on paper, but I hope you go back and think deeply,” especially mentioning the need to reconsider the “list of potentially restricted countries.” I interpret this as a hint that they need to reassess whether China should still be on that list.

The future could go two ways:

• Best case: FTX Trust adopts the judge’s suggestion, revises the plan, and removes China from the restricted list so all Chinese creditors can receive payouts.
• Prolonged delays: If they only make minor adjustments and refile similar motions, we will need to continue fighting for rights.

Attempts to limit creditors’ speech, third-party institutions buying claims to create panic

PANews: Before the October 23 hearing, there were dramatic events, such as FTX Trust suddenly submitting a revised motion and even trying to prevent you from speaking. What exactly happened?

Will: The FTX Trust team is very arrogant. From July to October, they didn’t communicate with us at all. Only days before the hearing did they submit a “revised” motion at the last minute, giving us just one day to respond—obviously to catch us off guard.

Even more outrageous, this new motion contains extensive requests for the court to prohibit me from speaking. The reasons include:

• I submitted nine motions over three months, accused of delaying the bankruptcy process;
• I have already recovered my personal claims and have no standing to speak;
• I cannot speak on behalf of my wife or corporate accounts without marriage proof or legal representation.

A bankruptcy entity spending so much effort to restrict a creditor’s speech is highly unprofessional.

PANews: You mentioned that Chinese creditors’ assets account for over 82% of the restricted region total—an astonishing figure. Why does FTX classify China as a restricted region? What might be the underlying reason?

Will: According to FTX’s data disclosed in the July motion, Chinese creditors account for 83.8% of the $400-500 million assets in the “potential restricted jurisdictions.”

As for the reason, it can’t be openly discussed in court, but speculation is widespread: John J. Ray III, the head of FTX’s restructuring, may be using asset recovery rate as a performance metric. If the large Chinese assets are confiscated and redistributed to other creditors, the overall payout ratio increases, making his performance look better.

Additionally, many claims are now acquired by hedge funds and debt management firms. It’s unclear whether these entities are connected to the restructuring team, but logically, the more funds they control, the greater their profit potential.

PANews: You also mentioned that these third-party institutions create panic when acquiring claims. How does this market operate? Are ordinary creditors forced to sell?

Will: Claim sales are indeed a path, but a very poor one. These acquirers spread panic (such as exaggerated reports from influencers) to depress claim prices. For example, they might buy claims at around 110%, but if they can ultimately recover 170%, the arbitrage is huge.

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

Will: There is still significant controversy over asset distribution. The FTX bankruptcy team sold some assets at market lows (like during the November 2022 collapse), such as AI company shares and Solana holdings, which led to creditors denominated in dollars being paid out at low prices—Bitcoin at around $16,000, which many consider unfair.

PANews: Will there be priority in future payouts? Especially regarding employees and shareholders?

Will: Yes, employee wages and vendor claims are prioritized, while ordinary creditors are paid later. Assets owed to employees on the platform will be compensated first, with shareholders and investment firms receiving payouts afterward.

PANews: How do the lawyers for FTX Trust behave at hearings?

Will: They generally maintain a decent attitude, mainly employing a “playing the victim” strategy. They repeatedly emphasize the case’s complexity and workload to gain the judge’s sympathy. When asked why other bankruptcy cases don’t require similar procedures, they only respond vaguely that “the FTX case is different,” without specifics. They even argue that creditors’ opposition is just impatience to get funds back, but in private emails, they can easily change account statuses. This contradiction further exposes the lack of transparency in the process.

Self-funded legal fees to avoid conflicts of interest, urging domestic creditors to stay updated

PANews: We understand you have spent a lot on legal fees, including hiring U.S. lawyers. Why don’t you accept donations from others?

Will: Legal fees are indeed high; I spent $60,000 on the last motion. But I insist on self-funding entirely. The reason is simple: accepting donations could raise questions about my motives, and FTX Trust might use that against me, making my stance seem less firm. So I’ve made it clear in the group that I do not accept any financial support.

For this hearing, the judge suggested FTX Trust provide translation services, but they ignored it until the day of the hearing. We prepared two options ourselves: I personally interviewed and hired a certified U.S. court translator, at my own expense.

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

Will: I want to emphasize that I hope those creditors with limited information will join us or at least follow my Twitter (@zhetengji) to stay informed about the real progress of the case.

Personally, I’m not worried—I have the ability to change all accounts to overseas ones. But I want to help ordinary domestic creditors. Some in the group have said that $30,000–$40,000 is their life savings. It’s unrealistic for them to spend another $10,000–$20,000 to immigrate and claim the remaining funds. Many are living in very difficult conditions. So, while I still have the energy and ability, I want to do my best to help them resolve this issue as soon as possible.