FTX seeks to 'clawback' donations to payback creditors

Published January 8th, 2023 - 04:05 GMT
FTX clawback
Shutterstock image



ALBAWABA — FTX's management is seeking to recover millions of dollars in donations made by the crypto exchange and its former CEO Sam Bankman-Fried and company executives to help pay back creditors following accusations that the contributions were funded with customers’ money, the Wall Street Journal reported.


Clawback provisions could force the return of billions of dollars paid in the months, or even up to a year prior to FTX's collapse, Cointelegraph reported.


Through September 2022, FTX's charity arm, Future Fund, committed more than $160 million to over 110 non-profit domestic and international organizations, according to the WSJ report. A spokesperson for Bankman-Fried said that charitable donations were made from the company's trading profits.


Prosecutors have accused Bankman-Fried of engaging in a years-long "fraud of epic proportions" that cost investors, customers and lenders potentially billions of dollars by using customer deposits to prop up his failing Alameda Research hedge fund.


FTX is alleged to have secretly transferred up to $10 billion of customer funds to Alameda to fund risky cryptocurrency trades.


The company’s new management said it has been “approached by a number of recipients” seeking to return the money they received from Bankman-Fried, his companies or FTX executives. 


FTX said it will set up a process to accept repayments and will take legal action to get back any money not returned, going as far as saying: “To the extent such payments are not returned voluntarily, the FTX debtors intend to commence actions before the bankruptcy court to require the return of such payments, with interest accruing from the date any action is commenced.”



© 2000 - 2023 Al Bawaba (www.albawaba.com)

You may also like