In a plot twist worthy of a crypto soap opera, FTX just did a 180 degree on a plan that would have snatched away nearly $800 million from customers in 49 countries.
The crypto exchange’s “Restricted Jurisdiction Procedure”, basically a legal way to say “sorry, you lose your money because your country’s laws are a headache”, has been pulled back after a massive, and understandable uproar.
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The customers from restricted countries lost all repayment rights
FTX’s Recovery Trust had initially asked a Delaware bankruptcy court to OK a scheme that labeled a huge chunk of customer claims as restricted.
This meant billions in customer funds locked behind a legal barrier, making getting repaid a labyrinth.
The cheek of it! The idea was to hire lawyers across those 49 countries to decipher whether paying customers would break local laws.
If yes, the customers from those countries lost all repayment rights, their money diverted to others. Beautiful, right?
„Are you kidding me?”
Predictably, this triggered an international social media storm of “Are you kidding me?” Especially loud was China, where most of these claims originated.
Weiwei Ji, a savvy investor from Singapore, stepped up for 300 Chinese claimants and slammed this play in court.
His advice to FTX? Don’t drag us into your geopolitical mess or we’ll sue you blind. Ji warned that if courts played along, other global giants might copy this nonsense, tossing payments based on passports.
So FTX, facing a tidal wave of backlash, withdrew the plan, a salvo won for customers worldwide. Creditors now feel seen, heard, and most importantly, hopeful about getting their money back.
The withdrawal signals FTX’s wish to dodge a messy courtroom brawl and focus on actual repayments. Formerly sidelined overseas investors are finally in the conversation, eager for quick action on asset recovery.
International bankruptcy battles
And the story isn’t over. Sam Bankman-Fried, FTX’s founder, prepares his appeal hearing in New York, still claiming innocence.
He argues FTX and its sister firm Alameda Research weren’t insolvent at collapse, accusing bankruptcy lawyers of selling assets on the cheap and blowing the crisis out of proportion.
His defenders nod to mismanagement as the root, while critics and insiders point fingers at billions of missing customer funds and dubious internal transfers.
From a promised crypto paradise to a courtroom circus, FTX’s drama is the textbook example about how tangled and international bankruptcy battles get, especially when billions hang in the balance.
💬 Editor’s Take:
FTX’s reversal feels like a small victory in a long war. It’s rare to see a fallen crypto titan bow to public pressure, but this time global outrage worked.
Maybe, just maybe, we’re inching toward an era where exchanges remember their users aren’t just numbers on a balance sheet — they’re people who believed in something bigger than greed.
Have you read it yet? Balancer’s $70 million mystery, aka who stole the staked Ether cookies?
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Cryptocurrency and Web3 expert, founder of Kriptoworld
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With years of experience covering the blockchain space, András delivers insightful reporting on DeFi, tokenization, altcoins, and crypto regulations shaping the digital economy.
📅 Published: November 5, 2025 • 🕓 Last updated: November 5, 2025
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