2 - 4 minute read
FTX, the now-bankrupt cryptocurrency exchange, has announced that it plans to recoup voluntary payments made to third parties prior to its collapse, even if it means pursuing legal action. These payments may include political donations made by the company’s founder and former CEO, Sam Bankman-Fried, in recent years. FTX stated that it has been approached by “a number of recipients of contributions or other payments” who are looking to return the funds they received from Bankman-Fried or other FTX executives. If these payments are not returned voluntarily, FTX plans to take action in bankruptcy court to require their return, along with accruing interest from the date any action is taken.
Bankman-Fried had become one of the United States’ most prominent political donors prior to FTX’s collapse, having spent almost $40 million on political campaigns in 2022, with the majority of funds going to the Democratic party. Several candidates, including Rep. Ritchie Torres of New York, have announced that they will be returning the “unsolicited donations” received from Bankman-Fried. It is unclear at this time how much money FTX is hoping to recoup or how many third parties it may take legal action against.
The news of FTX’s plans to recoup these payments comes as the company continues to deal with the aftermath of its bankruptcy filing in November. The exchange cited “adverse market conditions” as the main reason for its collapse, though it has faced criticism for its handling of customer funds and its ties to the highly controversial stablecoin Tether. The bankruptcy process is still ongoing, and it is unclear how much, if any, of the funds lost by FTX’s customers will be recovered.
In the wake of FTX’s bankruptcy, many in the cryptocurrency industry are calling for greater regulation and oversight of exchanges. The lack of regulation in the crypto space has long been a point of concern, with several high-profile hacks and collapses highlighting the potential risks for both investors and consumers. It remains to be seen what, if any, regulatory changes will be implemented in the wake of FTX’s bankruptcy and the company’s attempts to recoup voluntary payments.
