Before FTX collapsed in November last year, Sam Bankman-Fried donated millions of dollars to politicians for their campaigns. The exchange now wants all the funds back by Feb. 28, 2023.
Notably, FTX debtors have sent “confidential letters” to political figures, political action funds, and other recipients of contributions.
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The latest announcement follows the Dec. 19, 2022 one by FTX debtors. At that time they revealed the launch arrangements for such recipients to return funds voluntarily.
Now, if the payments are not returned voluntarily, FTX debtors “reserve the right to commence actions before the bankruptcy court to mandate the return of such payments, according to the statement released on Sunday. Additionally, the recipients will also have to bear interest costs from the date any action is taken.
FTX in the midst of clawing back “inappropriately” handed out funds
Like reported recently, FTX advisers have been looking to recover funds that Bankman-Fried inappropriately handed out. The firm is tracing down hidden assets that could potentially be used to repay creditors. Taking another step in that direction, lawyers recently asked the court for permission to question Bankman-Fried’s family and other former top executives.
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Leaving aside donations received by politicians, the bankrupt exchange has also reportedly been clawing back funds it donated to Florida students as scholarships.
A bankruptcy lawyer opined that going after the kids for the funds was a “moral issue.” Thus, it’d be at the discretion of FTX lawyers to decide whether or not it’s worth it to do so. Nevertheless, the lawyer cautioned that the prize money donated to mentor organizations “could certainly be up for grabs” if the company struggles to come up with the funds elsewhere.
FTX’s CEO John Ray III has has time and again stated that the exchange can be revived. Despite its bankruptcy, he hasn’t lost hope in its return and has left no stone unturned in pumping back life into FTX.