The FTX Recovery Trust has formally withdrawn its controversial motion to restrict repayments to creditors in certain foreign jurisdictions, after strong opposition from creditors and heightened court scrutiny.

In a court filing dated November 3, the Trust—overseeing liquidation of FTX’s remaining assets—withdrew the motion it had originally proposed earlier in the bankruptcy process. The motion sought to empower the Trust to determine whether claimants in jurisdictions with crypto restrictions or sanctions could lawfully receive repayments from the FTX estate.

That proposal would have affected creditors in about 49 jurisdictions, including China, Russia, Ukraine, Pakistan, and Saudi Arabia. The filing states that claims from those regions totaled roughly $800 million—about 5 percent of FTX’s estimated $16 billion estate.

Although the Trust has begun partial repayments to verified creditors, the withdrawal relieves immediate pressure on affected parties but does not resolve the broader legal challenges around cross-border distributions.

Skepticism Persists Over FTX

Creditors and their legal teams sharply criticized the original motion as lacking legal basis and unfairly discriminating by nationality. Particularly vocal were Chinese claimants, who described its withdrawal as a “major relief” after months of uncertainty over their repayment status.

One investor—using the X handle “Sunil Trades”—has actively championed recovery for Chinese creditors. He noted that over 300 objections had been filed against the motion.

He cautioned: “The motion could be refiled, so we need to ensure a procedure to get paid.” The Trust’s notice itself states that:

“if and when the FTX Recovery Trust seeks to renew the relief requested in the Motion, the FTX Recovery Trust shall file a motion and provide notice in accordance with the applicable rules.”

This implies that the Trust has not foreclosed revisiting restricted procedures later.

SBF Expected to Appeal Conviction

This development comes as Sam Bankman-Fried, former CEO of FTX, continues legal efforts to challenge his criminal conviction. In 2024, a U.S. federal court sentenced him to 25 years in prison after he was found guilty in 2023 on seven counts including fraud and conspiracy.

His defense is now pressing appeals before the U.S. Second Circuit, arguing that he was denied a fair trial when the judge excluded evidence showing he believed FTX had sufficient funds to cover customer withdrawals.

In his appeal, Bankman-Fried’s lawyers claim the trial judge and prosecutors presumed guilt rather than presiding impartially.

This is also shortly after Bankman-Fried claimed in a post on X that FTX was never truly bankrupt and still had sufficient assets to cover its losses. Analysts interpret the statement as an attempt to sway public sentiment and possibly strengthen his bid for clemency.