FTX creditor court filing that would have barred crypto payouts to 49 countries has been withdrawn

The motion, originally lodged in early November 2025, argued that the complex regulatory environment in the targeted jurisdictions made it “impracticable” to process crypto‑based claims. If approved, the restriction would have affected millions of retail and institutional investors in markets where FTX’s token‑sale proceeds remain a significant source of liquidity. Among the affected nations were Nigeria, Egypt and Zimbabwe – three of Africa’s largest crypto adopters, where digital assets have become a hedge against volatile fiat currencies and a conduit for remittances.

FTX’s Chapter 11 case, which has been unfolding since the exchange’s collapse in late 2022, has already seen a series of creditor committees negotiate the allocation of recovered assets. The court‑approved plan, overseen by the U.S. Bankruptcy Court for the Southern District of New York, aims to distribute both fiat and crypto assets to claimants worldwide, subject to local compliance checks. The withdrawn motion therefore removes a potential bottleneck that could have delayed or denied payouts to a sizable segment of the exchange’s global user base.

The episode underscores the growing tension between the decentralized nature of crypto and the patchwork of national regulations. “The attempt to carve out a list of ‘hard’ jurisdictions reflected a pragmatic, albeit controversial, approach to navigating compliance risk,” said a senior analyst at a blockchain consultancy. “Its withdrawal is a win for the principle that crypto assets should be treated uniformly, regardless of geography, especially as regulators worldwide move toward clearer frameworks.”

For African markets, the decision is particularly salient. Nigeria, for instance, accounts for one of the highest per‑capita Bitcoin trading volumes in the world, while Egypt’s nascent crypto ecosystem is expanding despite a cautious stance from its central bank. Zimbabwe’s crypto community has similarly leaned on digital assets to circumvent foreign exchange shortages. The continuation of FTX payouts could provide much‑needed liquidity to traders and businesses that have been awaiting the resolution of the bankruptcy for over two years.

The court’s order did not detail why the creditor group chose to withdraw the motion, but insiders suggest that negotiations with the reorganization trustee and the broader creditor committee may have yielded assurances regarding compliance procedures. The trustee, appointed to oversee asset distribution, has previously emphasized a “global, inclusive” approach to creditor repayments, citing the need to honor the rights of claimants irrespective of location.

The withdrawal also aligns with a broader industry trend of courts and regulators favoring more uniform treatment of crypto assets. Recent rulings in the United States and Europe have reinforced the notion that digital currencies, while subject to anti‑money‑laundering and securities laws, should not be arbitrarily excluded from legal processes based on jurisdiction alone.

As the FTX bankruptcy proceeds toward its final distribution phase, the focus now shifts to the mechanics of delivering crypto payouts across a fragmented regulatory landscape. Stakeholders will be watching closely to see how the court’s decision influences future bankruptcy cases involving digital assets, and whether it sets a precedent for more equitable treatment of claimants worldwide.

Source: here