01-07-2023, 11:08 PM
[SERIOUS] FTX Customers who withdrew in days, weeks or even months before bankruptcy
<!-- SC_OFF --><div class="md"><p>Bloomberg Law put out an article I've linked below that covers possible progression of the FTX bankruptcy court case. I encourage anyone to take a read. The following is not set in stone but simple a possibility everyone should be aware of. In the article the Bloomberg Law author says that users who withdrew in the days leading up to the bankruptcy could face demands to return the funds if a judge determines the withdrawals were not within the “ordinary course of business.” The thing is, with the absolute shenanigans, both knows and still yet-to-be-discovered, that occurred at and around the bankruptcy date it is very possible that this would be determined to not be within the ordinary course of business.</p> <p>There was the initial withdrawal chaos where some seemed able to withdraw while others could not. There was too the fact that Alameda/FTX (allegedly) dumped over 100M FTT tokens when prices started falling. There was the site freezing up a certain periods. There was the lies by SBF to try to calm the storm. There was the opening of withdrawals to Bahamian accounts that falsely implicated the Bahamas Securities Commission. There was the FTX credit facility that only allowed withdrawals through Justin-Sun/Tron-owned tokens that resulted in prices shooting up over 4600% over market price. None of these things(among others I surely missed) can be considered "ordinary course of business". Even long before this, the fact that FTX violated their own TOS by using customer funds is probably not ordinary course of business. This leaves withdrawals ranging back weeks to months potentially able to be clawed back(taken back) by bankruptcy courts.</p> <p>The article goes on to state that customers forced to return payments they took out in 90 days before the bankruptcy would hold unsecured claims against the estate for those amounts. Recipients can claim that they only took their own property and weren’t paid by the company as creditors. I'd say it is unlikely to extend to months but who really knows.</p> <p>Now the authors do state that securities or commodities transactions could have “safe harbors”. An existing bankruptcy safe harbor allows assets like commodities and securities to continue to be traded on an exchange without risk of clawback.</p> <p>​</p> <p><a href="https://news.bloomberglaw.com/bankruptcy-law/ftx-looks-at-years-of-litigation-to-recover-billions-in-assets">https://news.bloomberglaw.com/bankruptcy-law/ftx-looks-at-years-of-litigation-to-recover-billions-in-assets</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/OneThatNoseOne"> /u/OneThatNoseOne </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/105wf6w/serious_ftx_customers_who_withdrew_in_days_weeks/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/105wf6w/serious_ftx_customers_who_withdrew_in_days_weeks/">[comments]</a></span>
<!-- SC_OFF --><div class="md"><p>Bloomberg Law put out an article I've linked below that covers possible progression of the FTX bankruptcy court case. I encourage anyone to take a read. The following is not set in stone but simple a possibility everyone should be aware of. In the article the Bloomberg Law author says that users who withdrew in the days leading up to the bankruptcy could face demands to return the funds if a judge determines the withdrawals were not within the “ordinary course of business.” The thing is, with the absolute shenanigans, both knows and still yet-to-be-discovered, that occurred at and around the bankruptcy date it is very possible that this would be determined to not be within the ordinary course of business.</p> <p>There was the initial withdrawal chaos where some seemed able to withdraw while others could not. There was too the fact that Alameda/FTX (allegedly) dumped over 100M FTT tokens when prices started falling. There was the site freezing up a certain periods. There was the lies by SBF to try to calm the storm. There was the opening of withdrawals to Bahamian accounts that falsely implicated the Bahamas Securities Commission. There was the FTX credit facility that only allowed withdrawals through Justin-Sun/Tron-owned tokens that resulted in prices shooting up over 4600% over market price. None of these things(among others I surely missed) can be considered "ordinary course of business". Even long before this, the fact that FTX violated their own TOS by using customer funds is probably not ordinary course of business. This leaves withdrawals ranging back weeks to months potentially able to be clawed back(taken back) by bankruptcy courts.</p> <p>The article goes on to state that customers forced to return payments they took out in 90 days before the bankruptcy would hold unsecured claims against the estate for those amounts. Recipients can claim that they only took their own property and weren’t paid by the company as creditors. I'd say it is unlikely to extend to months but who really knows.</p> <p>Now the authors do state that securities or commodities transactions could have “safe harbors”. An existing bankruptcy safe harbor allows assets like commodities and securities to continue to be traded on an exchange without risk of clawback.</p> <p>​</p> <p><a href="https://news.bloomberglaw.com/bankruptcy-law/ftx-looks-at-years-of-litigation-to-recover-billions-in-assets">https://news.bloomberglaw.com/bankruptcy-law/ftx-looks-at-years-of-litigation-to-recover-billions-in-assets</a></p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/OneThatNoseOne"> /u/OneThatNoseOne </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/105wf6w/serious_ftx_customers_who_withdrew_in_days_weeks/">[link]</a></span> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/105wf6w/serious_ftx_customers_who_withdrew_in_days_weeks/">[comments]</a></span>