There seems to be some confusion around the following sentence: “Essentially, if you received money from an FTX entity in the debtor group anytime on or after approximately August 11, 2022, the bankruptcy process will probably ask you, at some point, to pay all or part of that money back.”
Some clarifications:
FTX Foundation, Inc. (the nonprofit corporation) is not currently in the debtor group. At least some FTXFF grantees received their funding from this nonprofit corporation, so this sentence doesn’t apply to them (yet – it could be added later).
It’s worth checking what entity you received your funding from. We believe that some grantees received funding from Alameda Research, North Dimension or other entities that are in the debtor group.
When I say “the bankruptcy process will probably ask you, at some point, to pay all or part of that money back” I mean, you are at least likely to receive a demand letter from the lawyers representing the debtor group. It costs next to nothing for the lawyers to send out demand letters, so a small grant amount isn’t necessarily protective against receiving a letter like that.
If you do receive a demand letter, at that point you will have options about whether and how to engage in a negotiation process with the debtors’ lawyers. If you don’t come to a resolution, the claim could go to formal litigation. The likelihood of this depends on a number of factors, including the amount of money at play. Keep in mind, this is probably years in the future; a lot can happen in the bankruptcy case (and in the world) between now and then.
There seems to be some confusion around the following sentence: “Essentially, if you received money from an FTX entity in the debtor group anytime on or after approximately August 11, 2022, the bankruptcy process will probably ask you, at some point, to pay all or part of that money back.”
Some clarifications:
FTX Foundation, Inc. (the nonprofit corporation) is not currently in the debtor group. At least some FTXFF grantees received their funding from this nonprofit corporation, so this sentence doesn’t apply to them (yet – it could be added later).
It’s worth checking what entity you received your funding from. We believe that some grantees received funding from Alameda Research, North Dimension or other entities that are in the debtor group.
When I say “the bankruptcy process will probably ask you, at some point, to pay all or part of that money back” I mean, you are at least likely to receive a demand letter from the lawyers representing the debtor group. It costs next to nothing for the lawyers to send out demand letters, so a small grant amount isn’t necessarily protective against receiving a letter like that.
If you do receive a demand letter, at that point you will have options about whether and how to engage in a negotiation process with the debtors’ lawyers. If you don’t come to a resolution, the claim could go to formal litigation. The likelihood of this depends on a number of factors, including the amount of money at play. Keep in mind, this is probably years in the future; a lot can happen in the bankruptcy case (and in the world) between now and then.