FTX withdrew in early July 2025 a proposal to restrict payments to creditors in 49 countries after a wave of objections. The reversal frees blocked funds and forces a country-by-country assessment by the administrator, with implications for investors, product teams and compliance departments. The move matters because it touched hundreds of millions of dollars in claims in markets such as China, Saudi Arabia and Russia.
Around July 2, 2025, the FTX Recovery Trust filed a motion to freeze or limit distributions to creditors domiciled in 49 jurisdictions. The stated intent was to reduce legal risks arising from conflicting regulatory frameworks or local prohibitions on crypto assets, according to the administrator’s argument. The plan triggered intense pushback from the creditor community, which labeled the measure as discriminatory and disproportionate.
Among the figures highlighted, users in China were estimated to have claims in the range of $380–$800 million, and the withdrawal of the plan allowed approximately $500 million that had remained blocked to be released.
The Trust has opted for a more granular strategy: hiring local counsel to assess the legality of each payment by jurisdiction, rather than applying a blanket restriction.
The fund return process continues on the schedule provided by the administrator: claims of $50,000 or less have payments slated from January 3, 2025, with disbursements within 60 days; in addition, significant tranches were announced, such as an estimated $1.2 billion payment on February 18, 2025 and another distribution exceeding $5 billion on May 30, 2025. Total recovered assets stand at around $14.5–$16.5 billion, pointing to the possibility of full nominal repayment for most creditors.
Implications for FTX Trus Recovery
A recurring objection is the valuation methodology: payments are fixed in 2022 dollars, which may translate into materially lower recovery in crypto; internal estimates place that recovery in digital-asset terms between 9% and 46% depending on subsequent appreciation. Activist Sunil Kavuri described the situation as a “double loss” for affected creditors.
Chapter 15 of the U.S. Bankruptcy Code facilitates cooperation between foreign courts and the U.S. bankruptcy system in cross-border proceedings.
The withdrawal reduces the risk of immediate mass litigation but increases operational and legal burden, as evaluating jurisdiction by jurisdiction raises costs and may delay payments.
For compliance and product groups, the resolution reaffirms the need for robust documentation on user residence and proof of ownership. For investors, fixation on 2022 values implies risk of real loss versus subsequent appreciation of crypto assets.
The next confirmed operational milestone is the $1.2 billion payment scheduled for February 18, 2025; in the meantime, the Trust warns the motion could be refiled if new legal risks emerge, setting the near-term focus for affected creditors.
