Disclaimer: I am a lawyer, but I am only able to advise on the law of England and Wales. I have no particular knowledge of the law of the Bahamas, New York or Delaware. What follows in any case are generic comments: any particular situation will depend on its own facts and you should take specific legal advice.
We have laws to decide what happens in this situation. These laws generally strike a reasonable balance between the interests of the various groups affected, which is necessarily complex given that some people are bound to get burnt in an insolvency. This will be a particularly complex case because of the numerous entities involved and the cross-jurisdictional elements.
There is probably a right answer. Charity trustees must use their funds for their charitable purposes, so unless they are obliged to return the funds, they may well be forbidden from doing so. If funds are returned, they must only returned to a person who can give good receipt for them, and there may be a dispute as to who that person is. I would suggest that no funds be returned until confirmation has been obtained from all relevant jurisdictions, and this may take some time. In particular, it’s unclear to me how the US Attorney for SDNY is getting in on this.
In these circumstances, I would strongly suggest that for now, any funds which might be FTX customer funds or otherwise the proceeds of fraud should be held separately pending confirmation of the position. Where funds have already been disbursed it’s probably unnecessary (and not legally possible) to require the grantees to return them, but having been put on notice that the funds may be the proceeds of fraud, making further disbursements risks an accessory liability (which may attach to the individuals responsible).
If a UK charity is uncertain how to proceed, it may well be worth consulting the Charity Commission. I think particularly it would be worthwhile getting the Charity Commission to approve anything which might look like a voluntary transfer (e.g. if the trustees were minded to comply with a request from a liquidator to return funds without being compelled to do so).
Disclaimer: I am a lawyer, but I am only able to advise on the law of England and Wales. I have no particular knowledge of the law of the Bahamas, New York or Delaware. What follows in any case are generic comments: any particular situation will depend on its own facts and you should take specific legal advice.
We have laws to decide what happens in this situation. These laws generally strike a reasonable balance between the interests of the various groups affected, which is necessarily complex given that some people are bound to get burnt in an insolvency. This will be a particularly complex case because of the numerous entities involved and the cross-jurisdictional elements.
There is probably a right answer. Charity trustees must use their funds for their charitable purposes, so unless they are obliged to return the funds, they may well be forbidden from doing so. If funds are returned, they must only returned to a person who can give good receipt for them, and there may be a dispute as to who that person is. I would suggest that no funds be returned until confirmation has been obtained from all relevant jurisdictions, and this may take some time. In particular, it’s unclear to me how the US Attorney for SDNY is getting in on this.
In these circumstances, I would strongly suggest that for now, any funds which might be FTX customer funds or otherwise the proceeds of fraud should be held separately pending confirmation of the position. Where funds have already been disbursed it’s probably unnecessary (and not legally possible) to require the grantees to return them, but having been put on notice that the funds may be the proceeds of fraud, making further disbursements risks an accessory liability (which may attach to the individuals responsible).
If a UK charity is uncertain how to proceed, it may well be worth consulting the Charity Commission. I think particularly it would be worthwhile getting the Charity Commission to approve anything which might look like a voluntary transfer (e.g. if the trustees were minded to comply with a request from a liquidator to return funds without being compelled to do so).