The FTX Recovery Trust has formally withdrawn its bid to restrict payouts to creditors hailing from restricted countries, a move that frees up nearly half a billion dollars for beleaguered customers around the globe.​

How Creditors Scored a Victory

FTX, once one of the world's largest cryptocurrency exchanges before its infamous 2022 collapse, has spent nearly two years in bankruptcy proceedings. Throughout that time, a cloud hung over thousands of creditors based in 49 countries facing payout limitations because their jurisdictions are subject to stringent regulatory barriers or international sanctions. The Trust’s original proposal, quietly filed in July, would have blocked distribution to creditors from countries such as China, Russia, Iran, Saudi Arabia, and Ukraine. The rationale: local rules would have made processing crypto payments legally complicated and possibly risky for the Trust’s administrators.​ That plan met with fierce resistance. More than 70 formal objections flooded the courts, with international users expressing outrage in online forums and international creditor groups banding together. A Chinese-origin investor living in Singapore, Weiwei Ji, spearheaded a petition, showcasing inconsistencies in FTX's approach and arguing that blanket bans would lead to unfair exclusion. U.S. Bankruptcy Judge John Owens soon voiced his own concerns, highlighting that similar asset recoveries had successfully compensated Chinese creditors without such harsh restrictions.​

The Economic Impact

The Trust’s withdrawal unlocks a stunning sum, almost $500 million, affecting roughly 5% of approved claims in the bankruptcy estate. The lion’s share (an estimated 82%) of these newly accessible funds belong to creditors tied to China, followed by sizable blocks in Russia, Iran, and Eastern Europe. These regions, where access to international crypto platforms remains controversial, were previously shut out from rounds of distributions. Now, thousands of users may finally see a path to recovery.​ FTX’s estate, which has clawed back nearly $16 billion in total assets since its collapse, had already begun early repayment rounds to eligible creditors. However, for users in restricted regions, their funds remained locked even as others around the world received compensation. 

A Win With Caveats

FTX Recovery Trust has left the door open to potentially refiling its motion in the future should compliance roadblocks arise. In the words of Weiwei Ji, “This is progress, but no one should assume it’s over until payments actually arrive.” Advocates caution that the repayments may fall short of replenishing the full value lost, especially when measured against the surging price of Bitcoin and other cryptos in late 2025.​ Despite the procedural breakthrough, many international creditors remain wary. They worry about processing delays, ongoing court review, and the broader precedent for future crypto bankruptcies. Sunil Kavuri, a leading creditor advocate, noted, “The repayments sound generous in dollars, but when measured in Bitcoin or Solana terms, the real recovery is far smaller.” For now, however, the Trust’s withdrawal stands as a beacon for global justice in the crypto world.​