FTX is attempting to 'claw back' donations in order to repay creditors


There is a possibility that clawback clauses will require the return of billions of dollars that were paid in the weeks, months, or even up to a year before FTX went bankrupt.

FTX's Sam Bankman-Fried.Photo byBybit / Flickr

The administration of FTX is working to retrieve donations totaling millions of dollars that were made by the cryptocurrency exchange, according to a report from the Wall Street Journal.

They want to pay back creditors following allegations that its former CEO, Sam Bankman-Fried and other executives, made donations to creditors with money that belonged to its customers.

The charitable arm of FTX, known as Future Fund, reportedly pledged more than $160 million to over 110 organizations across the United States and around the world from now until September 2022.

According to Bankman-Fried's spokesperson, the company makes donations to charitable organizations out of the profits it earns from trading.

Prosecutors have accused Bankman-Fried of engaging in a years-long "fraud of epic proportions" by using customer deposits to prop up his failing Alameda Research hedge fund. This allegedly caused investors, customers, and lenders to lose potentially billions of dollars.

Since September, when Bloomberg published a story on the extent to which the company was tied with Alameda Research, another trading firm that Bankman-Fried had previously started, FTX has been the subject of intense scrutiny.

Two days before Beto O'Rourke's campaign announced they paid back the donation Bankman-Fried made on November 2, CoinDesk reported that a large portion of Alameda's assets were made up of a cryptocurrency token produced by FTX, the firm's sister company.

This report was partly responsible for triggering a run on FTX, which ultimately resulted in the company's filing for bankruptcy on November 11.

Now the management at FTX has reportedly issued warnings to those who fail to refund those donations that Bankman-Fried made.

It is alleged that FTX secretly moved up to $10 billion dollars worth of customer funds to Alameda in order to finance potentially risky cryptocurrency trades.

Comments / 5

Published by

I write stories that matter


More from Victor

Comments / 0