FTX Bankruptcy Liquidation Controversy: Creditor Rights and Asset Disposal Raise Questions

Recently, a representative of FTX creditors posted a screenshot of a bankruptcy liquidation document on social media, which has attracted widespread attention. The document shows that if users belong to restricted foreign jurisdictions, FTX may confiscate their claim funds. Data indicates that among the claim funds from "restricted countries," 82% come from Chinese users. Due to domestic restrictions on cryptocurrency trading, these users may be deemed "illegal," thereby losing their eligibility to claim.

This news has sparked a strong reaction in the community. Many people question the liquidation team's actions, arguing that they lack a clear legal basis and see it as an excuse to evade responsibility. Although China has strict restrictions on cryptocurrency trading, the direct confiscation of user funds has led to controversy.

The bankruptcy reorganization of FTX is led by Wall Street veteran John J. Ray III as CEO, with a team from the well-known law firm Sullivan & Cromwell (S&C) in charge. John Ray was involved in handling the Enron bankruptcy case, bringing substantial revenue to S&C. However, the high fees of this team have caused dissatisfaction among creditors. It has been reported that the hourly rate for S&C partners reaches as high as $2000, and John Ray himself charges $1300 per hour. By early 2025, the legal service fees claimed by S&C in the FTX bankruptcy proceedings have reached $249 million.

Former FTX CEO Sam Bankman-Fried (SBF) revealed in an undisclosed congressional testimony draft that he faced pressure from the S&C team before filing for bankruptcy. SBF stated that he had attempted to continue fundraising to save the situation but was ultimately forced to accept bankruptcy proceedings.

The liquidation team's handling of the disposal of FTX's historical portfolio has also sparked controversy. Several high-potential projects were sold at prices far below their market value, including:

1. Cursor: Sold for an initial investment price of $200,000, while the company's valuation has reached $9 billion.

2. Mysten Labs/SUI: Sold for $96 million, while its token value once exceeded $4.6 billion.

3. Anthropic: Sold an 8% stake for $1.3 billion, while the company's valuation later reached $61.5 billion.

These transactions are considered to greatly harm the interests of creditors. Some analysts point out that FTX may have missed out on potential appreciation of over ten billion dollars in the disposal of these high-quality assets.

The liquidation team explained that these operations were aimed at "timely locking up funds and avoiding volatility risks," but this statement failed to dispel creditors' doubts. Some believe that these assets were transferred at a low price to institutions closer to the power center.

Currently, the bankrupt assets of FTX are expected to be globally liquidated and distributed with a total amount between $14.5 billion and $16.3 billion. However, if users from regions such as China are ultimately unable to claim smoothly, this will trigger new controversies. Even more concerning is that the new proposal submitted by the FTX team to the bankruptcy court includes a clause that exempts consultants from liability, which may further limit the rights of creditors.

This liquidation process involves not only huge amounts of capital but also the trust of investors in the legal system. For many ordinary investors, the collapse of FTX not only means financial losses but could also signify the end of hope. As the cryptocurrency market re-enters a new hotspot, the impact of this liquidation procedure is still ongoing, and its final outcome will have far-reaching effects on the entire industry.