FTX Trading has reportedly filed a lawsuit against the exchange’s former CEO, Sam Bankman-Fried (SBF), and some people from his inner circle to recover more than $1 billion, which it allegedly misappropriated before the company’s demise.
Numerous regulators and fallen investors have accused the market’s previous management team of orchestrating a gigantic crypto scam that eventually resulted in multi-million dollar losses. FTX Trading agreed with the assumption, saying it was “one of the biggest financial frauds in history.”
Firing more shots at SBF
The legal troubles for disgraced FTX founder Bankman-Fried are piling up, with the latest accusation coming from the new team behind FTX Trading.
In a recent lawsuit filed in Delaware bankruptcy court (seen by The Economic Times), it was accused of defrauding more than $1 billion in customer funds between February 2020 and November 2022 (the time the exchange filed for bankruptcy).
FTX Trading further claimed that Caroline Ellison (who was the head of Alameda Research), Zixiao “Gary” Wang (former FTX technology executive) and Nishad Singh (former engineering director) were also involved in the matter.
According to the complaint, SBF and its internal cycle used the money to finance political campaigns, buy luxury apartments, engage in speculative investments and finance other “pet projects.”
FTX Trading claimed that the fraudulent transfers included more than $725 million of principal that the leading crypto platform and West Realm Shires gave “without receiving any value in return.”
SBF and Wang allegedly misappropriated $546 million to buy Robinhood shares, while Ellison used nearly $29 million to pay himself bonuses.
John Ray believes FTX misused client funds from day one
FTX’s current CEO and head of restructuring, John J. Ray III, has been quite critical of the exchange’s previous management team.
He reclaimed last month that the company mixed up customer deposits early on in 2019, while former employees lied to banking institutions about using Alameda Research as a trading company for the transactions.
“The image that FTX Group sought to portray as the customer-centric leader of the digital age was a mirage. Since the inception of the FTX.com exchange, the FTX Group has commingled client deposits and corporate funds and misused them with abandon under the direction and design of previous senior executives,” Ray argued.
The American also argued that the former cryptocurrency giant owed users $8.7 billion as of November 2022. He concluded that the current management team has reduced that debt, recovering $7 billion in liquid assets so far.
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This post FTX sues SBF and other former executives to recover more than $1 billion (Report)
was published first on https://cryptopotato.com/ftx-sues-sbf-and-other-former-execs-to-recover-over-1-billion-report/
