TLDR
- FTX Seeks Delay Amid Legal Clash Over $470M Crypto Repayment Freeze
- Global Objections Stall FTX’s Plan to Halt Payments in Risky Regions
- FTX Faces Legal Storm Over $470M Freeze, Seeks More Time to Respond
- Court Showdown Looms as FTX Battles Creditors in 49 Crypto-Hard Nations
- FTX Delays Reply to 90+ Objections on Risky Jurisdiction Payout Freeze
FTX has requested a court delay to respond to over 90 objections opposing its motion to freeze $470 million in repayments. The bankruptcy estate cited a large volume of responses and limited time to prepare its legal reply. This legal action impacts creditors in 49 countries and centers on crypto law concerns and compliance risks.
Legal Pushback Stalls Repayment Efforts
FTX submitted a “Motion for Leave” in a Delaware court, seeking more time to respond before a scheduled hearing. The hearing will address the estate’s attempt to block repayments to creditors in jurisdictions with unclear or strict crypto laws. According to court documents, the estate needs time to prepare a reply to numerous challenges.
The estate identified legal risks tied to paying creditors in restricted jurisdictions, including possible penalties or imprisonment for directors. It said countries like Moldova could impose criminal charges even for auxiliary crypto activities. As a result, FTX aims to shield its directors and officers from any legal exposure.
FTX’s plan affects $470 million in claims, with China accounting for nearly $380 million, 82% of the total. The motion listed China, Russia, Egypt, and Ukraine among 49 restricted countries. The estate classified these jurisdictions as legally risky for making direct payments in U.S. dollars.
Creditors Challenge Motion, Cite Compliance and Transparency
Several creditors have criticized FTX’s move, arguing it is unfair and lacks a solid legal basis. Weiwei Ji, representing Chinese creditors, said the plan jeopardizes distribution rights despite full compliance with KYC and legal procedures. Ji claimed that affected claimants followed every rule under the plan, but now face arbitrary disqualification.
FTX creditor Sunil Kavuri confirmed that around $1.4 billion in claims remain unresolved as repayments continue. Meanwhile, crypto users expressed concern that the estate’s process could drive affected claims toward zero value. One user warned that selling might avoid losses, but even that option offers no certainty.
The creditors argued that FTX’s repayment method uses U.S. dollars, which are not banned in most regions. Ji emphasized that Chinese law treats cryptocurrencies as personal property, not illegal assets. Creditors contend that legal repayment is possible without violating national laws.
Repayment Tiers and Pending Claims Overview
FTX began creditor repayments in February 2025, more than two years after its collapse in November 2022. Repayments follow a tiered system, depending on the type and size of claims. Convenience class creditors receive 120% of approved claims, while general unsecured creditors receive 61%.
Customers on the international dotcom platform are set to recover 72 %of their claims. U.S.-based customers will receive 54%, based on the asset value at the time of collapse. The estate said repayments are calculated using U.S. dollar valuations from November 2022.
Claims from restricted jurisdictions represent about 5 percent of all approved claims, according to FTX’s filing. The estate maintains that proceeding with distributions in these countries could violate local laws. It aims to avoid penalties by pausing repayments until legal clarity emerges.
FTX Estate Faces Mounting Legal Pressure
The court is expected to evaluate the estate’s request and objections during the scheduled hearing this week. FTX faces growing legal pressure to address international creditor concerns while complying with global regulations. The outcome could determine how repayments proceed across the affected jurisdictions.
If the court grants the delay, FTX will gain time to strengthen its arguments and respond to global objections. Otherwise, the estate may be forced to revise its repayment approach or face further legal complications. The court’s decision will be crucial for claimants in restricted regions waiting for resolution.
