The Procedure for Returning FTX Funds Has Been Announced
- Bankrupt FTX has asked the receivers of contributions made by its management to refund the money willingly; otherwise, it may take legal action.
- The exchange has issued a warning to anyone who received payments from FTX or its previous leaders, stating that it intends to retrieve any money lost, even if it was donated to a good cause.
Former FTX CEO Sam Bankman-Fried and other executives’ contributions should be refunded, the team in charge of FTX’s bankruptcy procedures has advised.
This can be a good choice for grantees who want to return any FTX-related money immediately instead of waiting for the insolvency procedure to finish. But anyone interested in returning money should be aware that it’s essential to get adequate release-of-claims documentation in exchange for returning cash to prevent being liable for further clawbacks or other legal claims afterwards.
John J. Ray III, the new CEO of FTX, has been in charge of the company’s operations since the exchange declared bankruptcy in November.
In a press release dated Dec. 19, FTX stated that it had by now “been contacted by a large number of recipients of contributions or other payments” made by, or at the direction of, Sam Bankman-Fried or other officers, and that these entities have requested “directions for the return of such funds.”
These beneficiaries have asked for instructions on how to return the money to the FTX debtors. For the benefit of consumers and creditors, the FTX Debtors are coordinating with these recipients to ensure the swift restoration of these funds to the FTX Estates.
Bankman-Fried contributed an estimated $46.5 million to politics in the months before FTX’s demise. A spreadsheet made available by the nonprofit organisation OpenSecrets.org, which monitors lobbying and campaign finance in the United States, reveals that nearly $1.26 million of these funds have gone to Democratic candidates.
Sam Bankman-Fried, the former CEO of FTX who was detained in the Bahamas on Monday, reportedly accepted to be extradited to the United States to face his accusations despite receiving “the strongest possible legal counsel.”
The DoJ, CFTC, and SEC have filed eight accusations against SBF for allegedly misleading lenders and investors and for breaking campaign funding laws. The defendant may receive a 115-year sentence if proven guilty on all counts.