The bankruptcy estate of collapsed crypto exchange FTX has withdrawn its motion to restrict payouts to creditors in certain “restricted foreign jurisdictions.”
In a notice filed Monday, the FTX Recovery Trust confirmed it was pulling back its request to impose special payout procedures for countries such as China, which had been flagged as restricted under the approved bankruptcy plan.
“If and when the FTX Recovery Trust seeks to renew the relief requested in the Motion, the FTX Recovery Trust shall file a motion and provide notice in accordance with the applicable rules,” the filing stated, emphasizing that the motion was withdrawn without prejudice — leaving the option open to refile later.
Originally submitted in July, the motion sought court approval to pause or block creditor payouts in 49 jurisdictions, including China, Saudi Arabia, Russia, and Ukraine, due to regulatory uncertainty and restrictive local crypto laws.
Creditors Urge Caution Despite Win
The withdrawal marks a temporary victory for affected FTX creditors, many of whom had voiced concerns about being excluded from compensation.
However, some community members cautioned against premature celebration.
“This is a victory for all potentially affected creditors. But until you actually receive the compensation you’re owed, stay vigilant and keep acting together,”
wrote Weiwei Ji, an FTX creditor known as Will on X (formerly Twitter).
The notice suggests that while the “restricted countries” policy has been shelved for now, FTX’s recovery team may revisit it in the future — depending on how global regulations evolve.
The FTX estate’s decision to withdraw its “restricted countries” motion follows strong backlash from creditors, with more than 70 formal objections filed in bankruptcy court within weeks of the proposal’s submission.
During the wave of objections in July, creditor advocate Weiwei Ji cautioned that approving the motion could have had far-reaching consequences beyond the FTX case.
“This motion isn’t just about FTX creditors. It sets a dangerous precedent that could destroy trust in the global crypto ecosystem,” Ji wrote at the time.
Meanwhile, Sunil Kavuri, another prominent FTX creditor representative, warned on Sunday that the estate’s planned fiat repayments could significantly undervalue creditors’ actual losses.
“FTX creditors are not whole,” Kavuri said, noting that the 143% repayment figure touted by the estate applies to fiat valuations, not the crypto-denominated assets many users originally held.
Kavuri emphasized that, despite recent progress in the bankruptcy process, recovery expectations remain tempered — and creditors should continue pressing for fairer treatment that reflects crypto market realities.
