FTX customers file class action suit to have their payments prioritized

Four FTX customers filed a class action lawsuit demanding priority in repayment, citing $2 billion in customer funds which have gone missing.

The suit was filed in the U.S. Bankruptcy Court for the District of Delaware, where FTX's bankruptcy proceedings are ongoing. Retail customers who suffered financial losses following the bankruptcy filing of FTX and sister company Alameda Research “should not have to stand in line” with other creditors waiting for fund recovery, the complaint argues. 

Customer funds at FTX were misappropriated to cover financial gaps in closely affiliated investment fund Alameda Research, former Alameda CEO Caroline Ellison told prosecutors in a statement. The plaintiffs said that “unlawful” FTX transfers to Alameda were “in direct violation of FTX’s own customer agreements and terms of service, as well as common law and basic principles of honesty and fair dealing.”

A committee representing unsecured creditors was formed in mid-December for over 100 entities invested in the collapsed exchange and its affiliated companies who did not have collateral for what FTX owes them. 

“Cash and assets traceable to customers, which never belonged to FTX or Alameda and do not belong to the estates, should be earmarked solely for customers, and victimized customers should likewise have priority to any other cash possessed or recovered by [the group of affiliated debtors],” the court filing reads. 

FTX and Alameda co-founder Sam Bankman-Fried faces multiple fraud charges that could land him up to 115 years in prison. Ellison and FTX co-founder Gary Wang pled guilty to criminal and civil charges earlier this month, increasing the already intense legal pressure on Bankman-Fried.

Disclaimer: Beginning in 2021, Michael McCaffrey, the former CEO and majority owner of The Block, took a series of loans from founder and former FTX and Alameda CEO Sam Bankman-Fried. McCaffrey resigned from the company in December 2022 after failing to disclose those transactions.

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。