Thanks so much, Molly, I really appreciate you taking the time to write this, as I’m sure many others here do as well!
There is one thing that really confuses me about what you’ve written (that I think could be relevant to quite a number of folks here) that I’m hoping you can clarify. It’s related to what “FTX entities” we are talking about precisely here.
Some - perhaps many—of the grants seem to have been paid through an entity that it’s not clear to me is legally/formally related to the other entities you’re referring to here. And I’m wondering if that could change the situation.
My basic question is: is your post still relevant for grants that came from entities that are not part of the group of companies filing for bankruptcy?
And is your post still relevant for funds given by an FTX company to a 501(c)(3), and then the grants were later made from that 501(c)(3) to other grant recipients?
Below are more details about what I’m referring to.
You said that post is about the question:
“if I received FTX-related grant money, what am I supposed to do?” (with the footnote: I say FTX-related and not FTXF because my impression is that grant money came from many different entities, and not just FTX Foundation.)
and
“FTX filed for bankruptcy on Friday (November 11th, 2022). More specifically, Alameda Research Ltd. filed a voluntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code, by filing a standard form in the United States Bankruptcy Court for the District of Delaware. The filing includes 134 “debtor entities” (listed as Annex I); it looks like this covers the full FTX corporate group.”
and also:
“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.”
What confuses me about this is the definition of FTX entities. While payments for different grants came from different entities, there was one entity, in particular, that seems to have made quite a number of grants I think:
What’s more, this diagram that has been floating around of their corporate structure (https://i.imgur.com/sUb2efI.png) shows FTX Foundation Inc. (at the bottom of the chart) as being unconnected to the other entities.
The FTX Foundation Inc. seems to have Delaware file number 6586501, which, when I search for it in the Delaware corporate database (https://icis.corp.delaware.gov/eCorp/EntitySearch/NameSearch.aspx) with a different name - FTX PHILANTHROPY, INC. - but this entity is also not in the bankruptcy filing from what I can tell, and I think not on the corporate structure chart mentioned above either.
“We have a number of entities we can use to provide funding, and which we use depends on the exact circumstances. It could be our non-profit entity FTX Foundation Inc, or it could be a DAF [Donor Advised Fund] of one of our board members, or it could be something else if it’s a for-profit investment. ”
“That financial question also hovers over the future of the FTX Future Fund, the flagship foundation created by S.B.F. and other top executives at the company that promised to give away hundreds of millions of dollars annually and has already distributed $160 million this past year. But it’s not clear that all of the assets there are segregated for charity—this particular philanthropy is actually a collection of vehicles: a 501(c)3 foundation called FTX Foundation Inc. and several donor-advised funds of its board members, along with other, undisclosed vehicles if the Future Fund wants to back a for-profit company.”
I’m not Molly and I’m sure she’d know better than I, but I’m pretty confident that part of this post only applies to grantees who received their grant from one of the FTX entities that is now bankrupt—this is what she means by “the debtor group.”
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.
I’m not a bankruptcy lawyer, and I know how frustrating of an answer this is, but if the grant came from a non-debtor entity like FTX Foundation Inc., I think it’s very unclear what’s going to happen because a lot depends on information we don’t know yet. The exact sources and timing of any transfers to FTX Foundation may matter. The fact that the corporate form was, clearly, not respected within FTX complicates things further. But the fact that FTX Foundation Inc. was not bankrupt would not by itself confer immunity from the possibility of clawback. That’s 11 U.S.C. 550(a)(2).
I’ve noticed that it takes new orgs up to a year to show up in that search, so it might also be that they’ve applied for or gotten the status recently (given that FTX stuff was so new). Delaware corporation search suggests they are registered as a nonprofit corporation in Delaware—https://icis.corp.delaware.gov/ecorp/entitysearch/NameSearch.aspx, (have to search them by name).
Thanks so much, Molly, I really appreciate you taking the time to write this, as I’m sure many others here do as well!
There is one thing that really confuses me about what you’ve written (that I think could be relevant to quite a number of folks here) that I’m hoping you can clarify. It’s related to what “FTX entities” we are talking about precisely here.
Some - perhaps many—of the grants seem to have been paid through an entity that it’s not clear to me is legally/formally related to the other entities you’re referring to here. And I’m wondering if that could change the situation.
My basic question is: is your post still relevant for grants that came from entities that are not part of the group of companies filing for bankruptcy?
And is your post still relevant for funds given by an FTX company to a 501(c)(3), and then the grants were later made from that 501(c)(3) to other grant recipients?
Below are more details about what I’m referring to.
You said that post is about the question:
“if I received FTX-related grant money, what am I supposed to do?” (with the footnote: I say FTX-related and not FTXF because my impression is that grant money came from many different entities, and not just FTX Foundation.)
and
“FTX filed for bankruptcy on Friday (November 11th, 2022). More specifically, Alameda Research Ltd. filed a voluntary petition for bankruptcy under Chapter 11 of the Bankruptcy Code, by filing a standard form in the United States Bankruptcy Court for the District of Delaware. The filing includes 134 “debtor entities” (listed as Annex I); it looks like this covers the full FTX corporate group.”
and also:
“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.”
What confuses me about this is the definition of FTX entities. While payments for different grants came from different entities, there was one entity, in particular, that seems to have made quite a number of grants I think:
FTX Foundation, Inc.
I see no mention of this entity in the Alameda bankruptcy documents: (https://s.wsj.net/public/resources/documents/alameda-filing-11112022.pdf)
What’s more, this diagram that has been floating around of their corporate structure (https://i.imgur.com/sUb2efI.png) shows FTX Foundation Inc. (at the bottom of the chart) as being unconnected to the other entities.
The FTX Foundation Inc. seems to have Delaware file number 6586501, which, when I search for it in the Delaware corporate database (https://icis.corp.delaware.gov/eCorp/EntitySearch/NameSearch.aspx) with a different name - FTX PHILANTHROPY, INC. - but this entity is also not in the bankruptcy filing from what I can tell, and I think not on the corporate structure chart mentioned above either.
So, what is FTX Foundation Inc.? Here (https://forum.effectivealtruism.org/posts/2mx6xrDrwiEKzfgks/announcing-the-future-fund-1?commentId=qtJ7KviYxWiZPubtY), one of the people running the Future Fund says:
“We have a number of entities we can use to provide funding, and which we use depends on the exact circumstances. It could be our non-profit entity FTX Foundation Inc, or it could be a DAF [Donor Advised Fund] of one of our board members, or it could be something else if it’s a for-profit investment. ”
This article (https://puck.news/the-s-b-f-pandemic/) also referred to this org as a 501(c)(3):
“That financial question also hovers over the future of the FTX Future Fund, the flagship foundation created by S.B.F. and other top executives at the company that promised to give away hundreds of millions of dollars annually and has already distributed $160 million this past year. But it’s not clear that all of the assets there are segregated for charity—this particular philanthropy is actually a collection of vehicles: a 501(c)3 foundation called FTX Foundation Inc. and several donor-advised funds of its board members, along with other, undisclosed vehicles if the Future Fund wants to back a for-profit company.”
Thanks again for all your help!
I’m not Molly and I’m sure she’d know better than I, but I’m pretty confident that part of this post only applies to grantees who received their grant from one of the FTX entities that is now bankrupt—this is what she means by “the debtor group.”
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.
I’m not a bankruptcy lawyer, and I know how frustrating of an answer this is, but if the grant came from a non-debtor entity like FTX Foundation Inc., I think it’s very unclear what’s going to happen because a lot depends on information we don’t know yet. The exact sources and timing of any transfers to FTX Foundation may matter. The fact that the corporate form was, clearly, not respected within FTX complicates things further. But the fact that FTX Foundation Inc. was not bankrupt would not by itself confer immunity from the possibility of clawback. That’s 11 U.S.C. 550(a)(2).
Note I don’t see any results for FTX Foundation or FTX Philanthropy at https://apps.irs.gov/app/eos/determinationLettersSearch So it’s possible it’s not a 501(c)(3) (although it could still be a non-profit corporation).
I’ve noticed that it takes new orgs up to a year to show up in that search, so it might also be that they’ve applied for or gotten the status recently (given that FTX stuff was so new). Delaware corporation search suggests they are registered as a nonprofit corporation in Delaware—https://icis.corp.delaware.gov/ecorp/entitysearch/NameSearch.aspx, (have to search them by name).