Will hires a lawyer at his own expense to promote rights protection, emphasizing the importance of collective participation, and calling for more Chinese creditors to pay attention to the progress and jointly strive for fair compensation.

Interview: Tong, PANews

Editor: Yuliya, PANews

It has been nearly three years since the collapse of FTX, the largest bankruptcy case in crypto history. After a lengthy and complex liquidation process, creditors have recently welcomed the 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 have been uniformly classified as "restricted areas" and cannot participate in the payment process. The restrictive claims held by investors account for over 80% of all restricted assets, making them the largest group of creditors.

In the context of long-term opacity in the compensation process and limited communication channels, a group of Chinese creditors has begun to organize spontaneously. Will (X account @zhetengji) is one of the representatives, who has been promoting a motion against the classification of "restricted areas" since July of this year, calling for more creditors to join. After months of struggle, this movement has seen new progress.

Recently, Will accepted an exclusive interview with PANews, detailing key developments in the rights protection action, confrontations with the FTX bankruptcy restructuring team, changes in the judges' attitudes, and the hardships and helplessness of ordinary creditors in self-rescue within a complex system. In this "century case," Will's account not only presents the difficulties faced by ordinary creditors in self-rescue within a vast and complex judicial system but also reveals the additional pressures caused by procedural opacity, information asymmetry, and the involvement of third-party institutions.

A small number of creditors modify KYC to recover funds, while most still face information barriers

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

Will: Sure. After the hearing in July, we made some progress. I brought a group of creditors to speak at the hearing, which facilitated some overseas Chinese creditors to modify their residency information, and some successfully retrieved their assets. However, many of those who benefited have chosen to withdraw.

The October hearing made me realize two points:

Strength in numbers: The current Judge Owens places great importance on the collective opinions of creditors.

The information gap remains huge: There are still too few Chinese creditors aware of these key developments. The initial data disclosed by FTX indicated that Chinese creditors accounted for 8%, which was later revised to 4%. Even with the conservative estimate of 4%, it involves thousands or even tens of thousands of users. However, there are only about a thousand people in our rights protection group, and even fewer are active, which means a large number of affected individuals remain in information silos. Therefore, I took the initiative to contact you, hoping to let more people see the real situation and join our rights protection action.

PANews: You mentioned that after the motion in July, some overseas Chinese creditors resolved their issues. What were their main demands at that time? You also successfully retrieved some funds; how did you do that?

Will: These creditors are actually overseas residents holding Chinese passports. According to U.S. bankruptcy law, jurisdiction is determined by residency rather than passport nationality. At the hearing on July 22, the judge received numerous letters from Chinese creditors living overseas, questioning FTX Trust: why these individuals could not retrieve their assets and demanding they provide the corresponding modification process.

However, FTX did not provide a clear process at that time. After the meeting, we began trying to contact customer service via email, but each representative provided inconsistent information. Leveraging our numbers, I compiled the fragmented information we obtained and summarized a set of procedures that I believed were feasible before the asset snapshot on August 15. This process is quite complex and involves several steps:

• Modify KYC address: Contact the FTX support team via email and submit residency proof materials, such as utility bills or long-term visas.

• Modify tax form information.

• Modify information related to custodians (such as BitGo, Kraken).

I have several FTX accounts, one of which was opened in my name. Since I live in Singapore, I successfully modified the information according to this process and retrieved part of my assets. Most of the "troublemakers" who followed my lead to modify their information and actively voiced their concerns also received compensation. My personal understanding is that FTX wanted to resolve the issues quickly.

FTX Trust holds the "imperial edict," raising doubts about the transparency of the compensation process

PANews: You mentioned that there are other accounts that have not received compensation, such as your wife's account, which clearly meets the criteria. Why did it fail? Does this reflect issues in the compensation process?

Will: This is precisely the core of the problem—extreme opacity in the process. My wife and I live together in Singapore, and her account information was also modified, but due to the large amount, she did not receive compensation in the distribution on September 30.

We later discovered that FTX Trust holds a "imperial edict": before January 3, 2026, they have the right to mark any account as "disputed" without providing any explanation. This power was granted through a court motion two years before we intervened. Their reason to the court was that the FTX case is the largest in history, and due to the scale of the case and limited team resources, they needed more time to process it. As a result, extreme situations arose: accounts could be arbitrarily marked as disputed, users could not access their funds, and the Trust was not required to explain the reasons.

PANews: So, what exactly is the FTX Recovery Trust, which holds such significant decision-making power?

Will: The FTX Recovery Trust is primarily responsible for taking over the bankruptcy restructuring team of the original FTX assets and entities. However, there is an unreasonable aspect: most of the lawyers in the team are actually the original FTX lawyers. In other words, those who were initially responsible for user registration and signing agreements are now leading the bankruptcy restructuring. This situation, where the same team handles the original entity's illegal activities, is extremely rare in large bankruptcy cases.

More seriously, the U.S. Department of Justice (DOJ) typically assigns independent investigators in large bankruptcy cases, but there was none in the FTX case. Early on, the U.S. Trustee proposed appointing an independent investigator, but the judge at the time rejected it on the grounds of "impacting the bankruptcy process." This led to a lack of third-party checks and balances at the regulatory level, increasing the opacity of the process.

Judge questions the reasonableness of the restricted country list, compensation adjustments may be on the agenda

PANews: We noticed that the judge has changed to Judge Owens. How do you feel about the attitude of this new judge? He seems to be more concerned about the situation of Chinese creditors?

Will: Yes, Judge Owens' attitude gives us hope. After several hearings, I feel that Judge Owens places great importance on public opinion and the voices of creditors. An important shift is that at the October hearing, he raised some key questions:

He questioned FTX Trust: "Why can other cryptocurrency bankruptcy cases (like BlockFi, Celsius) smoothly compensate Chinese creditors, while you need the court to grant you a process that can avoid compensation or even confiscate?"

He cited an example where even Iranian creditors received compensation; why can't Chinese creditors?

He adopted the viewpoint from my previous motion, pointing out that "regulation of cryptocurrencies changes on a monthly basis," questioning whether it is too early for FTX to establish a rigid process that may conflict with new legislation in the future.

Compared to the hearing in July, where the judge only thought that FTX's motion lacked executable details (such as unclear timelines and unreasonable asset confiscation), this time Owens' questions were clearly more in-depth and considered from the creditors' perspective.

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

Will: The outcome is very favorable for us. Judge Owens ultimately requested FTX Trust to withdraw this motion. His exact words were, "It hasn't been formally rejected in writing, but I hope you all go back and think deeply," and he specifically mentioned rethinking the "list of potentially restricted countries." My personal understanding is that this hints they need to reassess whether China should still be on that list.

So, there are two possible directions moving forward:

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

Continued delays: If they only make minor modifications and propose a similar motion again, we will need to continue the fight for our rights.

Attempts to limit creditor speech, third-party institutions acquiring claims create panic

PANews: On the eve of the hearing on October 23, it seems that some dramatic events occurred, such as FTX Trust suddenly submitting a revised motion and even attempting to prohibit you from speaking. What exactly happened?

Will: The FTX Trust team is very arrogant. From July to October, they completely did not communicate with us. It was only a few days before the hearing that they submitted a so-called "revised" motion, giving us only one day to respond, clearly trying to catch us off guard.

What’s worse is that this new motion contained a large section requesting the court to prohibit me from speaking. The reasons included:

• I submitted nine motions in the past three months, which they claimed delayed the bankruptcy process;

• I have already retrieved my personal claim and am therefore unqualified to speak;

• I cannot represent my wife's or the company's account because I lack marriage proof or need a professional lawyer to represent the company account.

A bankruptcy entity devoting a large portion of its motion to limit a creditor's speech is, in itself, a very disgraceful act.

PANews: You mentioned that Chinese creditors' assets account for over 82% of the total in restricted areas, which is an astonishing figure. Why does FTX classify China as a restricted area, and what could be the underlying reasons?

Will: According to the data disclosed by FTX in the July motion, Chinese creditors account for 83.8% of the $400-500 million in assets in the "potentially restricted jurisdictions."

As for the reasons, although it cannot be publicly stated in court, the general speculation is that FTX's bankruptcy restructuring head, John J. Ray III, uses the asset recovery ratio as a performance evaluation metric. If this massive asset from the China region is confiscated and redistributed to other creditors, the overall compensation ratio would increase, making his record look better.

Additionally, there are now a large number of claims being acquired by hedge funds and debt management companies. Whether these institutions have any connections with the bankruptcy team is unknown, but logically, the more money left in the pool, the greater their profit margin.

PANews: You also mentioned that these third-party institutions create panic when acquiring claims. How does this market operate? Do ordinary creditors only have the option to sell their claims?

Will: Selling claims is indeed one path, but it's the worst option. These acquisition institutions lower claim prices by creating panic (for example, collaborating with KOLs to publish exaggerated reports). For instance, the acquisition price might be around 110%, but if they can ultimately receive 170% in compensation, the arbitrage space is huge.

PANews: Is the asset distribution in the FTX bankruptcy case fair? What is the current compensation ratio?

Will: The current asset distribution is still highly controversial. The FTX bankruptcy team sold some assets at market lows (such as during the FTX crash in November 2022), like shares in AI companies and Solana holdings, causing coin-based creditors to calculate compensation at low dollar prices, especially with Bitcoin calculated at $16,000, which many consider unfair.

PANews: In future compensation distributions, is there a priority issue? Will the rights of employees and shareholders take precedence over ordinary creditors?

Will: Yes, employee salaries and supplier debts are prioritized, with ordinary creditors at the back. Compensation for assets on the platform will also be handled first for employees, while compensation for shareholders and investment institutions will come later.

PANews: What was the attitude of the FTX Trust lawyers at the hearing?

Will: Their attitude in court is not bad; their main strategy is to "play the victim." They repeatedly emphasize the complexity of the case and the massive workload to gain the judge's sympathy. When the judge asks why other bankruptcy cases do not require similar processes, they only respond vaguely that "the FTX case is different," without explaining the specific differences. They even argue that creditors oppose only because they are eager to get their funds back, but in private emails, they can easily change account statuses, which exposes the opacity of the process again.

Self-funding to hire a lawyer to avoid conflicts of interest, calling on domestic creditors to pay attention to the latest developments

PANews: We understand that you have put in a lot for this rights protection, including high U.S. lawyer fees. Why not accept donations from everyone?

Will: Lawyer fees are indeed not cheap; my last motion cost $60,000. But I insist on self-funding. The reason is simple: if I accept donations from others, my position and motives might be questioned, and FTX Trust could use that to attack me, making me less "tough" in my rights protection efforts. Therefore, I clearly stated in the group that I do not accept any financial entanglements.

Including this hearing, the judge suggested in July that FTX Trust provide translation services, but they ignored it until just before the hearing. We prepared on our own; I interviewed and hired a U.S. court-certified translator, and the cost was also covered by me.

PANews: Finally, what would you like to say to Chinese creditors who are not yet aware of the situation?

Will: What I want to convey the most is that I hope those creditors who still lack information can join us or at least follow my Twitter (@zhetengji) to understand the real progress of the case.

Personally, I am not worried; I am fully capable of changing all accounts to overseas accounts. But I hope to help ordinary creditors in China. Some people in the group say that $30,000 to $40,000 is all their savings over decades. Asking them to spend another $10,000 to $20,000 to immigrate to retrieve the remaining funds is unrealistic. I see many people living in very difficult conditions. Therefore, while I still have the energy and ability, I hope to help them and resolve the issues as soon as possible.

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