The bankrupt estate of the collapsed cryptocurrency exchange FTX has withdrawn its application to restrict payments to certain "restricted foreign jurisdiction" creditors.
On Monday, the FTX Recovery Trust submitted a notice withdrawing its request for special procedures in jurisdictions such as China, which were marked as potentially restricted in the confirmed bankruptcy plan.
The notice stated: "If the FTX Recovery Trust seeks to reapply for the relief requested in the motion, the FTX Recovery Trust should submit a motion in accordance with applicable rules and provide notice." The notice added that the motion has been withdrawn without prejudice to future rights.
The trust submitted this motion in early July, seeking court authorization to freeze payments to creditors in 49 countries, including China, Saudi Arabia, Russia, and Ukraine, on the grounds that local cryptocurrency laws are unclear or restrictive.
The withdrawal of the motion is a significant victory for affected FTX creditors, but some have expressed that it is too early to celebrate.
"This is a victory for all potentially affected creditors. But remain vigilant and continue to act together until you receive the compensation you deserve," creditor Weiwei Ji (known as Will on the X platform) wrote in a post on Tuesday.
The decision to withdraw the motion came after strong opposition from creditors, with the bankruptcy court receiving at least 70 objections within weeks of the motion being filed.
In the objections filed in July, Ji warned that the court's approval of the FTX estate's motion regarding restricted countries could set a precedent for future cryptocurrency bankruptcy cases.
"This motion is not just about FTX creditors. It sets a dangerous precedent that could undermine trust in the global cryptocurrency ecosystem," he wrote at the time.
Notable FTX creditor representative Sunil Kavuri warned on Sunday that, given that payments are made in fiat currency rather than cryptocurrency, the value allocated by FTX may be far below many people's expectations.
"FTX creditors have not been fully compensated," he wrote, adding that the 143% fiat repayment planned by the FTX estate does not reflect losses valued in cryptocurrency.
Related: Stream Finance Suspends Platform Operations After Reporting $93 Million Loss
Original article: “FTX Withdraws Motion on ‘Restricted Countries’ but Warns of Possible Reapplication”
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