FTX sues Bankman-Fried for $1 billion in damages

FTX sues Bankman-Fried for $1 billion in damages

Author: Robert Strickland (crypto-journalist)

FTX sues Bankman-Fried for $1 billion in damages
FTX has sued Bankman-Fried and other ex-executives of the crypto exchange for $1 billion in damages
The lawsuit says executives allegedly misappropriated $1 billion before the crypto exchange filed for bankruptcy

FTX Trading on July 20 sued cryptocurrency exchange founder Sam Bankman-Fried and other former executives of the platform to recover more than $1 billion that the two allegedly misappropriated before FTX began bankruptcy proceedings, Reuters reported.

The complaint filed in Delaware bankruptcy court also names Caroline Allison, who ran hedge fund Alameda Research, former FTX chief technology officer Gary Wang, and former cryptocurrency exchange tech director Nishad Singh among the defendants.

The alleged fraudulent transactions took place between February 2020 and November 2022, when FTX filed for protection under Chapter 11 of the U.S. Bankruptcy Code. The application of this chapter involves the reorganization of the company to preserve the business.

Also, cryptocurrency exchange FTX demanded the return of $71.5 million in charitable programs. Some of the money was received by Latona under the guise of "investments and donations to biomedical organizations."

FTX Group's bankruptcy proceedings have been ongoing for several months. The management companies started to deal with the return of funds from the recipients of donations from ex-exchange CEO Bankman-Fried and his former colleagues as early as the end of December 2022. The company said that if the previously transferred funds are not returned voluntarily, FTX representatives will appeal to the court to return not only the money itself but also the interest on it, which will accrue from the date of filing documents with the court.

In June, FTX managers recovered $7 billion of the exchange's liquid assets. The crypto platform's former management had used customer funds at will since its inception, court documents alleged.

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