FTX Withdraws Controversial Motion in Bankruptcy Case
Collapsed crypto exchange FTX has withdrawn its “Restricted Jurisdiction Procedure” motion. The proposal could have stopped repayments to customers in 49 countries, including China, Ukraine, Pakistan, and Russia.
The withdrawal is part of FTX’s ongoing U.S. bankruptcy process. It follows strong opposition from creditors, especially those in China, where most claims affected by the motion originated. The plan sought to decide if payouts could be made legally in countries with restrictive or unclear crypto laws.
Creditors Oppose Blocking Customer Claims
The motion was filed in July when FTX asked a U.S. bankruptcy court to approve a plan handling claims from users in 49 restricted crypto jurisdictions. If approved, the plan could have excluded about $800 million in claims. This represented nearly 5% of FTX’s $16 billion estate.
- China accounted for roughly 82% of the disputed claims.
- More than 300 Chinese creditors opposed the plan.
- They were represented by Weiwei Ji in Delaware bankruptcy court.
The creditors called the plan unfair and legally unfounded. Under pressure, FTX withdrew the motion on Monday without prejudice. This allows the company to revisit the plan later through a new court process.
The withdrawal eased concerns for many international customers worried about losing repayments. It also suggests FTX will seek a more practical way to handle claims from countries with unclear crypto rules.
SBF Maintains “Never Insolvent” Defense
The legal update arrives as FTX founder Sam Bankman-Fried (SBF) prepares for an appeal hearing in New York. Convicted of fraud and conspiracy last year, he argues that FTX was “never insolvent.” He claims the collapse was a temporary liquidity crunch, not a loss of assets.
Last month, a social media account linked to SBF shared a 14-page document titled “FTX: Where Did the Money Go?” dated September 2025. In it, he stated the reported $8 billion shortfall “never left” the company. He accused the bankruptcy team of worsening the crisis with slow repayments and mismanagement.
FTX filed for bankruptcy in November 2022. This followed revelations of secret fund transfers between FTX and its sister firm, Alameda Research, causing a liquidity crisis. The crisis wiped out billions in customer assets.
SBF is serving a 25-year prison sentence but continues to contest his conviction. He is also seeking clemency from former U.S. President Donald Trump.
