Interview with FTX China creditor Will: Judge's questioning of the reasonableness of excluding Chinese users may bring a turning point; calls for more people to join the action.

Interview by: Tong, PANews

Edited by: Yuliya, PANews

Nearly three years have passed since the collapse of FTX, the largest 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, Chinese creditors remain excluded from this global compensation distribution. Due to regulatory and legal restrictions, they are categorized as "restricted territory" and ineligible to participate in the repayment process. Investors holding restricted claims account for over 80% of all restricted assets, making them the largest group of creditors.

Amid a prolonged lack of transparency in the compensation process and limited communication channels, a group of Chinese creditors began to organize themselves. Will (X account @zhetengji) is a representative of this group, having spearheaded a motion against the "restricted area" designation since July of this year and calling on more creditors to join. After months of struggle, this action has seen new progress.

Recently, Will gave an exclusive interview to PANews, detailing the key developments in his rights protection efforts, the clashes with the FTX bankruptcy reorganization team, the changing attitudes of the judges, and the hardships and helplessness of ordinary creditors trying to save themselves within a complex system. In this "case of the century," Will's account not only presents the difficulties ordinary creditors face in trying to save themselves within a vast and complex judicial system, but also reveals the additional pressure caused by procedural opacity, information asymmetry, and the involvement of third-party institutions.

A small number of creditors have recovered funds by modifying their KYC records, but most still face information barriers.

PANews: Hello Will, thank you for accepting our interview. We understand that there have been new developments in the FTX case recently, especially the motion in October. Could you please talk about some of the recent developments? What are the differences compared to the hearing in July?

Will: Okay. We made some progress after the hearing in July. I led a group of creditors to the hearing to speak and persuaded overseas Chinese creditors to change their place of residence information. Some of them successfully recovered their assets. However, many of those who benefited have chosen to withdraw.

The hearing in October made me realize two things:

Many hands make light work: Judge Owens now places great importance on the collective opinion of creditors.
The information gap remains enormous : far too few Chinese creditors are aware of these crucial developments. FTX initially disclosed that Chinese creditors accounted for 8%, later revised to 4%. Even with a conservative estimate of 4%, this involves thousands, even tens of thousands, of users. However, our rights protection group currently only has a thousand members, and even fewer are active, meaning a large number of victims remain isolated from information. Therefore, I proactively contacted you this time, hoping to let more people see the true situation and join our rights protection campaign.

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

Will: These creditors are actually overseas residents holding Chinese passports. Under U.S. bankruptcy law, jurisdiction is determined by place of residence, not passport nationality. At the hearing on July 22, the judge received numerous letters from Chinese creditors residing overseas, and he questioned FTX Trust: why these people cannot recover their assets, and demanded that they provide the corresponding amendment procedures.

However, FTX did not provide a clear procedure at the time. Afterwards, we tried contacting customer service via email, but each representative gave inconsistent information. Leveraging our group size, I compiled and summarized the fragmented information gathered and, before the asset snapshot on August 15th, developed a modification process that I believed was feasible. This process was quite complex, involving multiple steps:

To change your KYC address: Contact the FTX support team via email and submit proof of residence, such as utility bills or a long-term visa.
Modify tax form information.
Modify the information of the associated hosting provider (such as BitGo, Kraken).

I have several FTX accounts, one of which was opened in my own name. Since I live in Singapore, I successfully changed the information using this process and recovered some of my assets. The "troublemakers" who followed my lead and actively spoke out in the previous wave have also received compensation. My understanding is that FTX wanted to resolve the issues first.

FTX Trust wields considerable authority, raising questions about the transparency of its compensation process.

PANews: You mentioned that other accounts also failed to receive compensation, such as your wife's account, which clearly met the requirements. Why did it fail? Does this reflect a problem with the compensation process?

Will: That's the crux of the problem— the process is extremely opaque . My wife and I live in Singapore, and her account information has been updated, but because the amount is quite large, she still hasn't received compensation in the September 30th distribution.

We later discovered that FTX Trust possessed a powerful tool: until January 3, 2026, they had the authority to mark any account as "disputed" without providing any explanation. This power was granted through a court motion two years prior to our intervention. Their reasoning was that FTX cases were the largest in history, and that the sheer scale of the cases and the limited manpower required for their processing meant more time was needed. This resulted in extreme situations: accounts could be arbitrarily placed in dispute, users wouldn't receive their funds, and the Trust wouldn't be required to provide a reason.

PANews: So, what exactly is this FTX Recovery Trust, which has such enormous decision-making power?

Will: FTX Recovery Trust is primarily a bankruptcy reorganization team that took over the original FTX assets and entities. However, there's a significant absurdity: most of the lawyers on the team are actually the original FTX lawyers. In other words, the people who were initially responsible for user registration and signing agreements are now leading the bankruptcy reorganization. This situation, where the same team handles the original entity's illegal activities, is extremely rare in large-scale bankruptcy cases.

More seriously, the U.S. Department of Justice (DOJ) typically assigns an independent investigator to large bankruptcy cases, but this was not the case with FTX . Earlier, the U.S. Trustee had proposed appointing an independent investigator, but the judge at the time rejected the proposal on the grounds that it would "affect the bankruptcy process." This resulted in a lack of third-party checks and balances at the regulatory level, increasing the opacity of the proceedings.

Judges question the legitimacy of the restricted country list, and adjustments to compensation payments may be on the agenda.

PANews: We noticed that the judge has been changed to Judge Owens. What do you think of the new judge's attitude? He seems more concerned about the situation of Chinese creditors?

Will: Yes, Judge Owens' attitude gave us hope. After several hearings, I felt that Judge Owens highly valued the voices of the public and creditors. A significant shift was that at the October hearing, he raised some key questions:

He questioned FTX Trust: "Why are other cryptocurrency bankruptcy cases (such as BlockFi and Celsius) able to smoothly pay Chinese creditors, but you alone need the court to grant you a process that allows you to not pay or even confiscate assets?"
He cited an example, saying that in a certain case, even Iranian creditors received compensation, so why couldn't China?
He adopted the viewpoint in my previous motion, pointing out that "cryptocurrency regulation changes on a monthly basis," and questioned whether it was too early for FTX to formulate a rigid procedure now, which might conflict with new legislation in the future.

Compared to the hearing in July, where the judge only found that FTX's motion lacked enforceable details (such as an unclear timeline and the unreasonableness of directly seizing assets), and therefore required amendments, Owens's questions this time were clearly more in-depth and considered the issues from the perspective of creditors.

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

Will: The outcome is very favorable to us. Judge Owens ultimately ordered FTX Trust to withdraw the motion. His exact words were, "It wasn't rejected in writing, but I hope you go back and think it over carefully," and he specifically mentioned rethinking the "list of potentially restricted countries." My personal understanding is that this implies they need to reassess whether China is still suitable for inclusion on this list.

Therefore, there are two possible directions to take next:

Ideal scenario: FTX Trust adopts the judge's recommendation, modifies the plan to remove China from the restricted list, and all Chinese creditors can receive compensation.
Continue to delay: If similar motions are raised again with only minor modifications, we will need to continue our fight to protect our rights.

Attempts to restrict creditors' voices and the acquisition of debt claims by third-party institutions create panic.

PANews: On the eve of the hearing on October 23, something dramatic seemed to have happened, such as FTX Trust suddenly submitting a revised motion and even attempting to bar you from speaking. What exactly happened?

Will: The FTX Trust team is extremely arrogant. They didn't communicate with us at all during the three months from July to October. They only submitted a so-called "modified" motion a few days before the hearing, giving us only one day to respond, clearly trying to catch us off guard.

Even more outrageous, a significant portion of this new motion requests the court to bar me from speaking. The reasons include:

I have filed nine motions in the past three months, which are alleged to delay the bankruptcy process;
I have already recovered my personal debts and am no longer qualified to speak out.
I cannot speak on behalf of my wife or the company account because of the lack of a marriage certificate or the need for a professional lawyer to represent the company account.

It is highly undignified for a bankrupt entity to spend a significant portion of its motion restricting a creditor's right to speak.

PANews: You mentioned that Chinese creditors' assets account for over 82% of the total assets in the restricted regions, which is an alarming figure. Why did the FTX list China as a restricted region, and what are the possible reasons behind this?

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

As for the reason, although it cannot be stated publicly in court, it is widely speculated that John J. Ray III, the head of FTX's bankruptcy reorganization, used the asset recovery rate as a performance indicator. If this huge amount of assets in China were confiscated and redistributed to other creditors, the overall payout ratio would increase, making his resume look more impressive.

In addition, a large amount of debt is now being acquired by hedge funds and debt settlement companies. Whether these institutions are connected to the bankruptcy team is unknown, but logically, the more money left in the pool, the greater their profit potential.

PANews: You also mentioned that these third-party institutions create panic when acquiring debt. How does this market work? Are ordinary creditors left with no choice but to sell their debt?

Will: Debt is indeed one option, but it's the worst choice. These acquisition agencies drive down debt prices by creating panic (such as by collaborating with KOLs to publish exaggerated reports). For example, the acquisition price might be around 110%, but if they ultimately receive 170% compensation, the arbitrage potential is huge.

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

Will: The current asset allocation remains highly controversial. The FTX bankruptcy team sold some assets, such as AI company shares and Solana holdings, at market lows (such as during the FTX collapse in November 2022), resulting in cryptocurrency creditors being compensated based on the low value of USD, especially Bitcoin at a price of $16,000, which many people consider unfair.

PANews: In the future distribution of compensation, will there be any priority issues? In particular, will the rights and interests of employees and shareholders take precedence over those of ordinary creditors?

Will: Yes, employee salaries and supplier debts take priority, while ordinary creditors are next . Compensation for employee assets on the platform will also be prioritized, while compensation for shareholders and investment institutions will be processed later.

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

Will: Their attitude in court won't be bad; their main strategy is to "play the victim." They'll repeatedly emphasize the complexity of the case and the enormous workload to gain the judge's sympathy. When the judge asks why other bankruptcy cases don't require similar procedures, they only give a vague response that "the FTX case is different," without explaining the specific differences. They even sophistry by claiming that creditors object only because they're eager to get their funds back, but private emails can easily change account status. This contradictory behavior once again exposes the lack of transparency in the process.

To avoid suspicion of wrongdoing, he hired a lawyer out of his own pocket and urged domestic creditors to pay attention to the latest developments.

PANews: We understand that you've invested a lot in this effort, including high legal fees in the US. Why don't you accept donations?

Will: Legal fees are indeed expensive; my last motion cost me $60,000. But I insist on paying for everything myself. The reason is simple: if I accept donations from others, my stance and motives might be questioned, and FTX Trust might use it to attack me, making me less "assertive" in my advocacy . Therefore, I made it clear in the group that I would not accept any financial entanglements.

Including this hearing, the judge recommended in July that FTX Trust provide a translator, but they ignored it until the trial. We took precautions ourselves; I interviewed and hired a court-certified translator in the United States, paying for it myself.

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

Will: What I want to convey most is that I hope creditors who still lack sufficient information will join us, or at least follow my Twitter (@zhetengji) to learn about the true progress of the case.

Personally, I'm not worried; I'm fully capable of transferring all my accounts to overseas accounts. However, I'd rather help ordinary creditors in China. Some people in the group said that $30,000 to $40,000 represents their entire savings accumulated over decades. Asking them to spend another $10,000 to $20,000 to immigrate and retrieve the rest is unrealistic. I see many people living in very difficult circumstances. Therefore, while I still have the energy and ability, I hope to lend them a hand and resolve their problems as soon as possible.