Skip to content
Subscribe

Four years after FTX: the Supreme Court petition, and what Pakistan's rules now say about customer money

FTX filed for bankruptcy on 11 November 2022. Four years on, Sam Bankman-Fried is asking the US Supreme Court to hear his case, and the government's answer is due on 16 November. Pakistan has its own link to the collapse. Its creditors were on a list of countries whose payouts FTX's estate once prop

Ammar Khan

Ammar Khan

3 min read
An empty desk at night with a monitor and an open laptop lit up.
Photo by Sou Jest on Unsplash

Key takeaways

  • Bankman-Fried filed a petition for a writ of certiorari on 10 September 2026, after a US appeals court upheld his conviction on 12 June. The case is No. 26-349.
  • The US government asked for more time to respond, and the Court gave it until 16 November.
  • In July 2025 the FTX Recovery Trust proposed procedures that could have forfeited payouts to creditors in 49 "restricted" countries. Pakistan was on the list. The Trust withdrew the motion in November 2025, but reportedly kept the right to refile it.
  • PVARA's August 2026 regulations bar a licensed firm from treating customer assets as its own, and require proof of reserves checked independently every six months. No firm holds a PVARA licence yet.

Where the case stands

The Supreme Court docket shows the petition was filed on 10 September and docketed on 15 September. The government's response was originally due on 15 October. On 13 October the Court granted a motion extending the deadline "to and including November 16, 2026".

Five amicus briefs supporting the petition arrived on 15 October. They came from bankruptcy law professors, the Due Process Institute, the National Association of Criminal Defense Lawyers, a group of legal scholars, and a group led by the economist John J. Donohue.

The Court has not decided whether to hear the case. It grants only a small share of the petitions it receives. Once the government has filed its response, the petition can be listed for one of the justices' private conferences.

Bankman-Fried is serving a 25-year sentence. The 2nd Circuit upheld the conviction in June.

Pakistan on the "restricted" list

FTX's bankruptcy estate has been repaying creditors in rounds. In July 2025 the FTX Recovery Trust asked the court to approve "Restricted Jurisdiction Procedures" for creditors in countries where it said paying out might break local law.

The Block reported that the Trust had identified "49 potentially restricted foreign jurisdictions, which include China, Russia, Ukraine, Pakistan and Saudi Arabia". The claims from those countries made up about 5% of an estimated $16 billion, and 82% of that value was in China. Under the proposal, a payout to a creditor in a jurisdiction that ended up restricted would revert to the Trust for redistribution to other creditors.

Creditors objected. Most of the objections came from China. On 3 November 2025, according to Parameter, the Trust withdrew the motion "without prejudice", meaning it can refile with proper notice.

We could not find how many FTX creditors are in Pakistan or what their claims are worth. The filing as reported did not break that out.

What FTX did, and what PVARA's rules say

The criminal case turned on customer money. Prosecutors said deposits at FTX were sent to Bankman-Fried's trading firm, Alameda Research, and used as if they were the firm's own.

PVARA's licensing regulations, notified on 21 August 2026 as S.R.O. 1419(I)/2026, speak to this directly.

  • No use of customer assets as the firm's own. Regulation 33(2) says a licensee "shall not treat Customer Assets as its own assets". It may not "use, pledge, encumber, lend, rehypothecate, or otherwise dispose of" them, except where the regulations allow it and with the customer's "prior informed explicit consent".
  • Assets must be there to return. Regulation 33(3) requires arrangements so customer assets are "available for timely return", with periodic reconciliations.
  • Proof of reserves. Regulation 112 requires a licensee holding clients' crypto to show its liabilities to them are "fully matched by reserve assets". That proof must be "subject to independent validation on six monthly basis or earlier".

PVARA's activity-specific regulations (S.R.O. 1420(I)/2026) add that a custodian may not use, lend or stake client assets "solely by virtue of its Custody Licence".

These rules apply to licensed firms. As of our last check, PVARA had counted 75 applications and licensed no one.

What this means for Pakistani users

Pakistanis who hold crypto on an exchange today are trusting a firm that no Pakistani regulator has yet licensed or inspected. PVARA's segregation and proof-of-reserves rules will protect customers only once firms are licensed under them and PVARA starts checking.

Until then, the practical lessons of FTX still apply. Funds on an exchange are a claim on that exchange. If it fails, customers wait in a bankruptcy queue, possibly abroad and for years. And as the restricted-jurisdictions motion showed, a foreign estate may treat creditors differently depending on the country they live in.

If you have an FTX claim, follow the Trust's own notices on its claims portal, not social media, and watch for any refiled restricted-jurisdictions motion.

What we're watching

  • The US government's response, due 16 November, and whether the petition goes to conference.
  • Any new FTX Recovery Trust distribution date, or a refiled restricted-jurisdictions motion.
  • PVARA's first licences, and when its proof-of-reserves validations begin.

Sources

Share WhatsApp X LinkedIn

More on

All stories