FTX Cancels Plan to Write Off $800 Million in Customer Claims

FTX has officially abandoned its controversial proposal that could have stripped customers from 49 countries of nearly $800 million in repayment claims.

The decision marks a significant win for international creditors of the collapsed crypto exchange and restores hope for thousands of users who have been waiting more than two years for reimbursement.

FTX Withdraws Plan After Global Backlash The FTX Recovery Trust, which manages the bankrupt exchange’s remaining assets, filed a motion with the Delaware bankruptcy court to withdraw its “restricted jurisdiction” proposal.

The plan aimed to identify countries where local regulations or government restrictions might prevent repayments to affected users. Under the initial proposal, FTX would have hired local law firms in each of the 49 countries to determine whether repayments were legally permissible. If a lawyer concluded that payouts violated local laws, those customers would automatically lose their claims, and their funds would be redistributed among other creditors. The plan sparked fierce opposition, particularly from creditors in China, Hong Kong, and Singapore, who argued that FTX had no right to punish victims based on their geography.

Chinese Creditors Unite and Prevail Asian investors denounced the proposal as discriminatory and unethical.

Weiwei Ji, a Singapore-based investor representing over 300 Chinese creditors, filed a formal objection in the Delaware bankruptcy court, stating that FTX had no legitimate basis for including China among restricted countries. “FTX has no right to decide who gets repaid based on nationality. If this plan were approved, it would set a dangerous precedent, allowing other companies to deny customers their money purely because of where they live,” Ji argued. Facing growing global pressure, FTX withdrew the plan, a move that was welcomed by creditors across Asia and beyond, as all affected claims will now remain eligible for repayment.

Creditors Celebrate While FTX Seeks Stability The reaction among creditors has been overwhelmingly positive — many said they finally feel that FTX is beginning to listen to their concerns.

By dropping the plan, the company also avoids a new wave of lawsuits that would have followed if the court had approved it. According to creditor representatives, the next focus will be accelerating the asset distribution process to begin partial repayments.

The Delaware bankruptcy court is expected to revisit the repayment framework later this month to determine how much each customer can expect to recover.

Sam Bankman-Fried Appeals Fraud Conviction Meanwhile, FTX founder Sam Bankman-Fried continues his legal battle and is preparing for an appeal hearing in New York, challenging his fraud conviction.

He insists that both FTX and its sister company Alameda Research were not insolvent when the exchange collapsed in 2022.

According to his defense, mismanagement by bankruptcy lawyers and the undervaluation of key assets worsened the company’s situation and led to unnecessary liquidation. However, legal experts and former FTX insiders maintain that billions in customer funds went missing and that substantial sums were transferred to Alameda prior to the collapse.

Conclusion: A Step Toward Justice, But the Battle Isn’t Over The withdrawal of the $800 million claim write-off marks a major victory for global FTX creditors and a move toward a fairer bankruptcy process.

Customers in Asia and other regions will now retain their right to compensation, while FTX attempts to repair its reputation and complete its restructuring plan. Still, questions remain — especially when and how much creditors will actually be repaid.

One thing is clear, though: with this reversal, FTX has taken a crucial step toward rebuilding trust with its long-suffering international users.

#FTX , #SBF , #CryptoNews , #CryptoMarket , #DigitalAssets

Stay one step ahead – follow our profile and stay informed about everything important in the world of cryptocurrencies! Notice: ,The information and views presented in this article are intended solely for educational purposes and should not be taken as investment advice in any situation. The content of these pages should not be regarded as financial, investment, or any other form of advice. We caution that investing in cryptocurrencies can be risky and may lead to financial losses.“