FTX Compensation Plan Launched, Users from China, Russia, and Three Other Countries Temporarily Unable to Participate

In 2022, a large cryptocurrency trading platform was once a benchmark in the industry, but later experienced a collapse. After more than two years of bankruptcy reorganization, the platform's compensation plan has finally entered the execution stage. The first round of compensation officially started on the 18th of this month, with convenience users claiming amounts below $50,000 prioritized to receive approximately 119% cash compensation calculated based on the coin price in November 2022. This type of user accounts for 98% of the total user base, and currently, the first batch of $800 million has been paid to 162,000 accounts, with the remaining funds to be distributed gradually.

However, the creditor representative of the platform recently stated that users from five countries, including China, Russia, and Ukraine, are unable to participate in the bankruptcy distribution. Although users from Ukraine, Russia, Nigeria, and Egypt account for a smaller proportion, users from mainland China account for 8% of the platform's total user base, involving a large number of people and a significant amount of money.

There is currently no official explanation for the reasons why some are unable to participate in the allocation. From a legal and financial regulatory perspective, possible factors include:

1. Jurisdictional barriers and compliance risks: China, Egypt, and Nigeria have adopted a prohibitive regulatory model for virtual assets. Compensating users from these countries may conflict with local regulatory policies, posing significant compliance risks.

2. SWIFT Sanctions and Wartime Financial Controls: Russia has been excluded from the SWIFT system for certain reasons, making cross-border fund payment and settlement difficult. Ukraine, on the other hand, has seen large cross-border fund flow approvals essentially come to a standstill due to wartime financial controls.

For Chinese users, the following solutions may be available in the future:

1. Establish special clearing channels: The platform clearing team may establish special clearing channels with countries that adopt prohibitive regulatory models.

2. Using stablecoins for online compensation: Although this solution may still carry compliance risks.

Overall, the only thing users in mainland China can do right now is wait. Building a special clearing channel requires cooperation and breakthroughs from various countries and international financial regulatory frameworks, and this process may take some time.