I agree with this post from a moral perspective, though one thing it does not touch on is the legal question. My guess is that, in the same way that a court probably wouldn’t try to claw back money from a utility company/janitor/etc. that FTXFF beneficiaries are also probably safe, but IANAL so maybe somebody who knows more there could comment.
Geoffrey Miller also made the important point that “if there are any legal ‘clawbacks’ of money in the future, that would have to be done through official legal channels—and they might not care that we’ve already sent money back somewhere for allegedly honorable reasons. So we might end up returning a bunch of money, and then being legally obligated to return the same amount again, and also being required to pay income tax on whatever we first received.”
I’d say people with unspent funds should pay close attention to what OP has to say in the coming days.
Molly suggests that “generally FTX grantees should avoid spending additional $$ on legal advice about this just yet” before reading what OP has to say on the topic, which seems fair enough. But I suspect some people with significant amount of unspent funds may ultimately want to seek legal advice sometime between now and the end of the year.
For individuals, my understanding is that unspent funds that are still on one’s books at the end of 31 Dec may count as “profits” and be taxed accordingly, so “just never spend any of the money” may be difficult in practice.
Some people are talking about “clawbacks”. This means feds can take money back within 90 days of bankruptcy declaration. This is only for Chapter 7. FTX entities filed for Chapter 11. This means they will try to liquidate everything they can to *return* to people. Not claw back.
I agree with this post from a moral perspective, though one thing it does not touch on is the legal question. My guess is that, in the same way that a court probably wouldn’t try to claw back money from a utility company/janitor/etc. that FTXFF beneficiaries are also probably safe, but IANAL so maybe somebody who knows more there could comment.
Jason has made a comments on this issue with a number of points worth considering; I found this thread particularly eye-opening. I came away feeling that the risk of clawbacks shouldn’t be ignored.
Geoffrey Miller also made the important point that “if there are any legal ‘clawbacks’ of money in the future, that would have to be done through official legal channels—and they might not care that we’ve already sent money back somewhere for allegedly honorable reasons. So we might end up returning a bunch of money, and then being legally obligated to return the same amount again, and also being required to pay income tax on whatever we first received.”
More useful information at Tyrone-Jay’s comment here including a note that from Molly that OP intends to share information from its external counsel about clawbacks very shortly.
I’d say people with unspent funds should pay close attention to what OP has to say in the coming days.
Molly suggests that “generally FTX grantees should avoid spending additional $$ on legal advice about this just yet” before reading what OP has to say on the topic, which seems fair enough. But I suspect some people with significant amount of unspent funds may ultimately want to seek legal advice sometime between now and the end of the year.
For individuals, my understanding is that unspent funds that are still on one’s books at the end of 31 Dec may count as “profits” and be taxed accordingly, so “just never spend any of the money” may be difficult in practice.
I found this tweet encouraging: