The collapse of FTX Group may not yet be finished with its contagious spread, as clawback provisions could force businesses and investors to return billions of dollars paid in the months leading up to the crypto exchange’s collapse, an insolvency attorney told Cointelegraph.
In short, a “clawback” refers to money paid out that is required to be returned due to special circumstances or events, such as an insolvent company that needs to recover funds paid within 90 days before filing for Chapter 11. If the creditor is an insider, the 90-day period is extended to one year.