FTX Sues SBF, Former Execs to Recover Over $1 Billion

Crypto alternate FTX is making an attempt to regain $1 billion in a lawsuit in opposition to founder Sam Bankman-Fried (SBF) and a few former executives. FTX’s new administration argues the funds have been misappropriated by way of doubtful offers and transactions made earlier than the coin buying and selling platform went bankrupt final fall.

Failed Crypto Firm FTX Files New Lawsuit Against Founders and Chiefs

FTX Trading, the corporate which operated what was one of many largest crypto exchanges, sued its founder Sam Bankman-Fried and different former executives on Thursday in an try to get better greater than $1 billion they allegedly diverted.

Besides Bankman-Fried, among the many defendants named within the swimsuit are co-founder and former FTX Chief Technology Officer Gary Wang, former CEO of SBF’s Alameda Research hedge fund Caroline Ellison, and former FTX Engineering Director Nishad Singh, Reuters and Bloomberg reported.

The grievance filed in U.S. Bankruptcy Court, District of Delaware, accuses them of misappropriating and utilizing the cash to finance luxurious condominiums, political contributions, speculative investments, and different “pet projects.”

The transfers occurred between February 2020 and November 2022, when the corporate sought Chapter 11 safety. According to FTX, these transfers may be reversed beneath the U.S. Bankruptcy Code or Delaware regulation as they have been made earlier than the bankruptcy filing on Nov. 11.

The lawsuit alleges that the fraudulent transactions included over $725 million of fairness that FTX and West Realm Shires, one other entity managed by SBF, awarded “without receiving any value in exchange.” Bankman-Fried and Wang additionally took $546 million from Alameda in May 2022 to amass shares in Robinhood Markets, and Ellison used $28.8 million to pay herself bonuses. FTX identified:

The transfers have been made when [FTX-related entities] have been bancrupt, and defendants knew it.

Following his extradition from the Bahamas, the place FTX was headquartered, SBF was sued for alleged fraud within the United States, amongst different prison fees to which he has pleaded not responsible. Ellison, Wang, and Singh pleaded responsible and agreed to cooperate with prosecutors.

In the newest grievance, FTX additionally claims that Sam Bankman-Fried’s protection is being partially funded from a $10 million “gift” he gave his father. This and the opposite lawsuits are a part of efforts by the bankrupt firm’s new CEO, John Ray, and his crew to recoup funds that may repay collectors, together with clients of the collapsed cryptocurrency alternate.

Do you assume FTX’s new administration will get better the funds allegedly misappropriated by its former executives? Share your ideas on the case within the feedback part under.