FTX Faces Legal Hurdles as Creditors Push Back Against $470M Repayment Freeze

FTX's bankruptcy estate is encountering significant legal challenges as it seeks to halt $470 million in creditor repayments across 49 jurisdictions. The exchange has requested a delay from a Delaware court after receiving more than 90 objections to its motion, citing insufficient time to prepare adequate responses. A hearing is imminent to address concerns about crypto compliance risks in regions with strict or unclear digital asset regulations. This development underscores the complexities of navigating international bankruptcy proceedings in the rapidly evolving cryptocurrency landscape.

FTX Seeks Court Delay Amid Backlash Over $470M Repayment Freeze in 49 Countries

FTX's bankruptcy estate faces mounting legal resistance as it attempts to freeze $470 million in creditor repayments across 49 jurisdictions. The exchange requested a Delaware court delay after receiving over 90 objections to its motion, citing insufficient time to prepare adequate responses. A hearing looms to address concerns about crypto compliance risks in regions with stringent or ambiguous digital asset laws.

Legal documents reveal FTX's strategy to shield directors from potential criminal liability in jurisdictions like Moldova, where even auxiliary crypto activities may carry penalties. The estate's 'Motion for Leave' underscores the complex interplay between bankruptcy proceedings and global regulatory fragmentation. Creditors in crypto-restrictive nations now face prolonged uncertainty as the court weighs jurisdictional risks against repayment obligations.

FTX Bankruptcy Advances with Bahamas Claims and US Court Hearing

Several FTX creditors have received official verification under the Bahamas legal process, marking a pivotal step in the protracted bankruptcy proceedings. The validation clears a path for distributions, though regulatory hurdles—particularly stringent KYC requirements—have slowed progress. Approximately $290 million in validated claims remain outstanding as of late June.

Joint liquidators from PricewaterhouseCoopers and Brian Simms are steering the case through complex cross-jurisdictional challenges. The Bahamas process, modeled after UK and EU legal frameworks, has faced delays due to compliance checks. Creditors now await the announcement of a record date for the next distribution cycle.