{"id":17666,"date":"2025-11-04T14:32:34","date_gmt":"2025-11-04T13:32:34","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=17666"},"modified":"2025-11-04T14:32:34","modified_gmt":"2025-11-04T13:32:34","slug":"ftx-estate-withdraws-motion-regarding-payouts-for-restricted-countries","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/11\/04\/ftx-estate-withdraws-motion-regarding-payouts-for-restricted-countries\/","title":{"rendered":"FTX Estate Withdraws Motion Regarding Payouts for Restricted Countries"},"content":{"rendered":"

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The insolvency estate of the now-inoperative crypto exchange FTX has rescinded its appeal to restrict payouts to creditors in specific \u201cprohibited foreign jurisdictions.\u201d<\/p>\n

On Monday, the FTX Recovery Trust submitted<\/a> a notice retracting its petition to establish special procedures for regions like China, which had been identified as potentially restricted under the approved bankruptcy plan.<\/p>\n

\u201cIf and when the FTX Recovery Trust intends to renew the request made in the Motion, the FTX Recovery Trust will submit a motion and furnish notice in compliance with the relevant regulations,\u201d the notice indicates, mentioning that the motion has been withdrawn without prejudice.<\/p>\n

The trust had filed the motion in early July, seeking the court\u2019s permission to halt payouts to creditors in 49 nations<\/a> including China, Saudi Arabia, Russia, and Ukraine, citing ambiguous or restrictive local cryptocurrency regulations.<\/p>\n

Don\u2019t rejoice prematurely, creditor cautions<\/h2>\n

The retraction marks a significant triumph for impacted FTX creditors, yet some argue that it\u2019s premature to rejoice.<\/p>\n

\u201cThis is a success for all potentially impacted creditors. However, until you receive what you are due, remain alert and continue to act collectively,\u201d Weiwei Ji, a creditor known as Will on X, stated<\/a> in a post on Tuesday.<\/p>\n

Source: <\/em>Sunil Kavuri<\/em><\/a><\/figcaption><\/figure>\n

The estate\u2019s choice to withdraw the motion followed strong opposition from creditors, with at least 70 objections lodged in bankruptcy court<\/a> shortly after the motion\u2019s filing.<\/p>\n

Amid the objections in July, Ji warned that court endorsement of the FTX estate\u2019s motion regarding restricted nations could have established a precedent for forthcoming cryptocurrency bankruptcies.<\/p>\n

Related: <\/strong><\/em>Bankman-Fried claims his greatest misstep was entrusting FTX to new CEO prior to bankruptcy<\/strong><\/em><\/a><\/p>\n

\u201cThis motion isn\u2019t solely about FTX creditors. It creates a risky precedent that could undermine trust in the global cryptocurrency ecosystem,\u201d he expressed at that moment.<\/p>\n

Sunil Kavuri, a well-known FTX creditor representative, cautioned on Sunday that the value of FTX distributions may be significantly lower than anticipated<\/a> by many, considering that the payouts are made in fiat rather than cryptocurrencies.<\/p>\n

\u201cFTX creditors are not fully compensated,\u201d he remarked, adding that the FTX estate\u2019s proposed 143% fiat repayment doesn\u2019t represent losses in crypto-valued terms.<\/p>\n