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I'd imagine there's a huge problem in that FTX did not declare bankruptcy until the vast majority of their liquid assets had been removed by the bank run. If th

I'd imagine there's a huge problem in that FTX did not declare bankruptcy until the vast majority of their liquid assets had been removed by the bank run. If they had declared bankruptcy before the run, most people might have gotten out with a 50% haircut. Instead, after the run, those left over will get nothing and those who got out will got 100%.

HWR_14 4y ago
Those who got out will be told they need to give back 50% (assuming you are right that that is how much was left).
- TedDoesntTalk 4y ago
  Even non-US customers? How?
  - HWR_14 4y ago
    The US has an excellent record of recovering stolen money from most places you would want to live (and reciprocally of helping other countries)
    - Scoundreller 4y ago
      Maybe I wouldn’t, but at least a billion people live somewhere happily out of US extra-jurisdiction.
      - oblio 4y ago
        Do you have a list with those places? Google isn't helping much.
        Cass 4y ago
        I assume they're referring to the over a billion people living in China. Whether China is a place you'd want to live depends entirely on your personal cirumstances, of course.
- dcow 4y ago
  How?
  - HWR_14 4y ago
    Bankruptcy law allows for the clawback of preferential transfers. Any transfers within 90 days of bankruptcy are assumed to be preferential. Or transfers for a longer time to insiders. And that's without fraud. With fraud they can go back farther. Like, Madoff's investors who got out in time had to turn over a lot of cash.
    - dcow 4y ago
      But this is nothing like the Madoff situation. So you're saying if I withdraw my rightful funds 80 days before a company goes bankrupt, and I use those funds to pay for consumable goods, and consume those goods, that those funds can be clawed back and I am now in debt? That doesn't sound right at all. I also just looked and a preferential transfer would be when the company that goes bankrupt deliberately pays off some debs but not others, hence giving some creditors preference. The notion does not seem to extend to individuals otherwise regularly conducting business with the company. That can't be resolved the way you suggested. Customers who ran FTX will not be required to return their funds so that someone can distribute some of their money to FTX's creditors, or even so that things can be "fairly" distributed across all customers...
      - HWR_14 4y ago
        Not only can it happen like that, it can happen like that even if there is no fraud. Paying off some customers you owe money to would be giving those creditors preference, I don't see how else you could interpret it. Heck, FTX went out of its way to only allow Bahamian citizens to withdraw money at the end, imagining that would be the jury pool deciding their fate soon.
        deleted 4y ago
        [deleted]
        4y ago

HWR_14 4y ago

Those who got out will be told they need to give back 50% (assuming you are right that that is how much was left).

TedDoesntTalk 4y ago
Even non-US customers? How?
- HWR_14 4y ago
  The US has an excellent record of recovering stolen money from most places you would want to live (and reciprocally of helping other countries)
  - Scoundreller 4y ago
    Maybe I wouldn’t, but at least a billion people live somewhere happily out of US extra-jurisdiction.
    - oblio 4y ago
      Do you have a list with those places? Google isn't helping much.
      - Cass 4y ago
        I assume they're referring to the over a billion people living in China. Whether China is a place you'd want to live depends entirely on your personal cirumstances, of course.
dcow 4y ago
How?
- HWR_14 4y ago
  Bankruptcy law allows for the clawback of preferential transfers. Any transfers within 90 days of bankruptcy are assumed to be preferential. Or transfers for a longer time to insiders. And that's without fraud. With fraud they can go back farther. Like, Madoff's investors who got out in time had to turn over a lot of cash.
  - dcow 4y ago
    But this is nothing like the Madoff situation. So you're saying if I withdraw my rightful funds 80 days before a company goes bankrupt, and I use those funds to pay for consumable goods, and consume those goods, that those funds can be clawed back and I am now in debt? That doesn't sound right at all. I also just looked and a preferential transfer would be when the company that goes bankrupt deliberately pays off some debs but not others, hence giving some creditors preference. The notion does not seem to extend to individuals otherwise regularly conducting business with the company. That can't be resolved the way you suggested. Customers who ran FTX will not be required to return their funds so that someone can distribute some of their money to FTX's creditors, or even so that things can be "fairly" distributed across all customers...
    - HWR_14 4y ago
      Not only can it happen like that, it can happen like that even if there is no fraud. Paying off some customers you owe money to would be giving those creditors preference, I don't see how else you could interpret it. Heck, FTX went out of its way to only allow Bahamian citizens to withdraw money at the end, imagining that would be the jury pool deciding their fate soon.
      - deleted 4y ago
        [deleted]
      - 4y ago