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The FTX Bankruptcy Statute of Limitations Has Expired
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Molly
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Good(3)Good quality. Reputable source with community review or editorial standards, but less rigorous than peer-reviewed venues.
Rating inherited from publication venue: EA Forum
Relevant to EA community members and organizations that received FTX or FTX Future Fund grants and were concerned about bankruptcy clawback liability; provides a practical legal update but is not formal legal advice.
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Summary
As of November 2024, the two-year US bankruptcy statute of limitations for FTX clawback claims against grant recipients has expired without the bankruptcy estate filing to extend it. Recipients who have not been sued or signed tolling agreements are likely protected from US clawback actions. International recipients may still face exposure under local laws with longer limitation periods.
Key Points
- •The two-year US bankruptcy clawback deadline passed in November 2024; FTX estate did not extend it.
- •Grant recipients not sued in bankruptcy court and without tolling agreements should be safe from US clawback actions.
- •Demand letters alone do not constitute court actions and do not toll the statute of limitations.
- •Recipients outside the US (e.g., New Zealand with 6-year limits) may still face clawback risk under local law.
- •Post is informational, not legal advice; recipients with specific concerns are encouraged to consult counsel.
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The FTX Bankruptcy Statute of Limitations Has Expired — EA Forum
This website requires javascript to properly function. Consider activating javascript to get access to all site functionality. The FTX Bankruptcy Statute of Limitations Has Expired
by Molly Jan 3 2025 1 min read 3 104
Community FTX collapse Frontpage The deadline for FTX to file clawback claims against grantees was November 2024. The bankruptcy estate could have filed a plan to extend the two-year statute of limitations, but it appears that they did not do so.
Any recipient of FTX or FTX FF funding who has not had a complaint filed against them in bankruptcy court, and who has not signed a tolling agreement with the bankruptcy estate, should be safe from clawback actions going forward. I encourage you to check with counsel about individual situations. [1] A demand letter is not a court action, and negotiations in response to a demand letter would not toll the statute of limitations.
As always, before you comment in response to this post, I would urge you to assume that lawyers for the FTX Group will see your comments.
^ This isn’t legal advice and a lawyer who represents you and can address your specific situation will be able to provide more clarity than a forum post!
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1 0 4 Comments 3 Comment Sorted by New & upvoted Click to highlight new comments since: Today at 1:06 AM Tyrone-Jay Barugh 🔸 Jan 4 2025 9 0 0 I think it's plausible that grant recipients in countries other than the United States could be subject to clawback action under the laws of those countries, and the applicable limitation period may well be longer.
In my case, I won't be totally certain until the six year limitation period under New Zealand law has run. Luckily there are much more favourable defences under New Zealand law, and even if their prospects of success were higher I somewhat doubt that Sullivan & Cromwell would bother instructing New Zealand counsel to chase up a relatively meagre grant.
If your grant was small (e.g. salary/expenses for one person), you might adopt the same "she'll be right" attitude I'm taking to this. But if you're based in a country other than the United States and got a big grant then you may want to keep this risk in the back of your mind and/or speak with a lawyer in that country.
Epistemic status: I suspect it's more of a hypothetical risk than a real one, but mentioning it for completeness and for the benefit of folks with a very low appetite for risk.
Reply Cullen 🔸 Jan 5 2025 12 0 0 I’m obviously not a bankruptcy lawyer, but I was surprised to read this because I assumed that the statute of limitations depended on the jurisdiction of the bankruptcy estate, not the clawback claimee. Am I wrong? Or are there parallel proceedings in other jurisdictions?
Reply Guy Raveh Jan 5 2025 8 0 0 Personally since my grant was probably too small to justify the effort of a clawback, and the statute of li
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