FTX Estate Seeks More Time to Halt Foreign Repayments Amid Legal Challenges

The estate of the defunct cryptocurrency exchange FTX has filed a motion in a Delaware court seeking more time to respond to over 90 objections challenging its proposed halt to repayments in certain foreign jurisdictions. The motion, titled "Motion for Leave," aims to provide the FTX estate with additional time to present its case for halting repayments to creditors in these restricted areas. The document was submitted on Sunday, with a hearing scheduled for Tuesday to address the original motion that sparked the legal dispute.

The FTX estate's original motion sought to suspend repayments to countries with unclear or restrictive cryptocurrency laws. The estate argued that proceeding with repayments to residents of these countries could result in fines, penalties, and even criminal charges, including imprisonment for directors and officers. This move impacts creditors in 49 countries, with claims totaling $470 million. Notably, residents of China comprise the largest group, accounting for 82% of claims in these restricted countries, amounting to $380 million.

Creditors have responded critically to the FTX estate's efforts to block repayments. Weiwei Ji, representing hundreds of Chinese creditors, expressed frustration, stating that they have not taken a break since seeing FTX's response to their objections. Another community member, known as "Mr. Purple," suggested that the process, if approved by the judge, could lead to these claims being reduced to zero. Sunil Kavuri, an FTX creditor, mentioned that there is $1.4 billion in FTX claims still awaiting resolution.

The FTX estate began repaying the exchange’s creditors in February, more than two years after filing for bankruptcy in November 2022. The estate's request for additional time underscores the complexities involved in managing the bankruptcy proceedings and ensuring a fair distribution of assets among all creditors. The situation highlights the challenges faced by the estate in navigating the legal and financial intricacies of the bankruptcy process, as well as the need to balance the interests of various stakeholders.