Re: “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.”
Can I just seek a clarification? Does ‘receiving money ’ also apply to the withdrawal of assets that were stored on the exchange or just to grants etc? To put it another way, how probable is it that those who withdrew their legally owned assets will be asked to return them?
Can’t provide legal advice, but I would generally caution against depositors relying on analysis provided with grantees in mind, and vice versa. Withdrawals by depositors raise some different questions—e.g., I have seen at least one source question whether deposits were ever FTX’s property that would ever be subject to clawbacks.
The debtor/trustee would be delerect in its duty not to pursue large clawback claims against foreign targets. Odds would depend on the grantee’s exposure to the US legal system and the foreign legal system’s views.
The Madoff case may be somewhat illustrative at a very broad level. Note that it was in a different judicial circuit, so exactly zero decisions are binding on the DE bankruptcy court—even those by the court of appeals.
[on phone] Thank you so much for sharing this.
Re: “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.”
Can I just seek a clarification? Does ‘receiving money ’ also apply to the withdrawal of assets that were stored on the exchange or just to grants etc? To put it another way, how probable is it that those who withdrew their legally owned assets will be asked to return them?
Can’t provide legal advice, but I would generally caution against depositors relying on analysis provided with grantees in mind, and vice versa. Withdrawals by depositors raise some different questions—e.g., I have seen at least one source question whether deposits were ever FTX’s property that would ever be subject to clawbacks.
Additionally:
Are clawbacks against overseas/non-us investors likely be pursued and enforced?
Are there are any relevant cases or precedents that we should look at?
The debtor/trustee would be delerect in its duty not to pursue large clawback claims against foreign targets. Odds would depend on the grantee’s exposure to the US legal system and the foreign legal system’s views.
The Madoff case may be somewhat illustrative at a very broad level. Note that it was in a different judicial circuit, so exactly zero decisions are binding on the DE bankruptcy court—even those by the court of appeals.