- FTX has sent confidential letters to all of the exchange’s political donations beneficiaries to make a refund by February 28.
- The trading platform said it is willing to seek legal action if need be.
Bankrupt crypto trading platform, FTX Derivatives Exchange is doing all it can to claw back all the funds that were donated under the leadership of its founder and former CEO, Sam Bankman-Fried (SBF). In one of the latest moves by the digital currency trading firm, confidential letters have been sent to political beneficiaries seeking a refund.
The firm confirmed sending the letters, with February 28 placed as the deadline for the politicians to refund the sum. When FTX was still in its prime, the trading platform was a known mega-donor to US election campaigns through Political Action Committees (PACs). Tagged as one of the biggest donors to President Joe Biden’s campaign, FTX under Sam Bankman-Fried has spent almost $93 million in supporting choice candidates across political lines.
The exchange in its Press Release revealed that the FTX donations might have been made by either the disgraced former CEO or any of the firm’s subsidiaries. The announcement reads.
FTX Debtors are sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried, or other officers or principals of the FTX Debtors (collectively, the “FTX Contributors”). These recipients are requested to return such funds to the FTX Debtors by February 28, 2023,.
The company said the deadline placed is a result of an earlier notice pushed out back in December last year in which it request such political donations to be returned voluntarily.
FTX Ready to Seek Legal Option to recoup Donations
In the call for a refund of the donated funds, FTX said it is ready to explore legal options should the beneficiaries of the political donation refuse to make the refunds as demanded. According to the firm, it will also seek interest in the donated funds starting from the date the legal action commences.
The trading platform also said it reserves the right to request the repayment of the donations even though the beneficiaries have sent the funds to charities or other third-party beneficiaries. The announcement reads,
To the extent such payments are not returned voluntarily, the FTX Debtors reserve the right to commence actions before the Bankruptcy Court to require the return of such payments, with interest accruing from the date any action is commenced, [..] Recipients are cautioned that making a payment or donation to a third party (including a charity) in the amount of any payment received from a FTX Contributor does not prevent the FTX Debtors from seeking recovery from the recipient or any subsequent transferee.
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Journey to repay creditors
Though the process may look slow to creditors whose funds are locked up on FTX, it is still relatively faster than other known bankruptcies such as that of Celsius Network and Voyager Digital.
When it filed for bankruptcy, FTX declared it has a total number of creditors ranging from 100,000 to 1 million. The journey to repay these investors has been bumped by discoveries of misappropriated funds. At the moment, the current CEO John Ray III is trying to pool this together and with targeted proposed sales of some subsidiaries, he plans to make full repayment as soon as possible.
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