FTX Estate waives the requirement for limited payouts in the country Coinstar

The bankruptcy estate of defunct crypto exchange FTX has dropped a request to limit distributions to creditors in “potentially restricted foreign jurisdictions.”

FTX Recovery Trust on Monday filed notice of withdrawal of application for entry of order in support of a confirmed plan authorizing the conduct of limited jurisdiction proceedings in potentially limited foreign jurisdictions such as China.

“If and when FTX Recovery Trust seeks renewal of the relief sought in the Petition, FTX Recovery Trust will file a petition and give notice in accordance with applicable rules,” the notice said, adding that the petition was withdrawn without prejudice.

The foundation filed the motion in early July, seeking court approval to freeze payments to creditors in 49 countries including China, Saudi Arabia, Russia and Ukraine, citing unclear or restrictive local cryptocurrency laws.

Don’t celebrate too early, warns the creditor

The withdrawal is a significant victory for affected FTX creditors, but some say it is too early to celebrate.

“This is a win for all potentially affected creditors. But until you get the compensation you’re owed, stay vigilant and keep working together,” Weiwei Ji, a creditor known as Will on X, wrote in a post on Tuesday.

The bankruptcy estate’s decision to withdraw the petition followed intense pushback from creditors, with at least 70 objections filed in bankruptcy court within weeks of the filing.

Amid remarks in July, Ji warned that the court’s approval of FTX’s request for restricted countries could have set the standard for future cryptocurrency bankruptcies.

Related: Bankman-Fried says his biggest mistake was handing FTX over to a new CEO before bankruptcy

“This request is not just about FTX creditors. It sets a dangerous precedent that could destroy confidence in the global crypto ecosystem,” he wrote at the time.

Sunil Kavuri, a prominent representative of FTX’s creditors, warned on Sunday that the value of FTX’s distribution could be far less than many expect, given that payouts are made in fiat, not cryptocurrency.

“FTX’s creditors are not whole,” he wrote, adding that the planned 143% repayment of FTX’s assets does not reflect losses in crypto-denominated terms.