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  • By The Financial District

FTX Customers File Class Action Suit To Recover Assets

FTX customers have filed a class action lawsuit against the failed crypto exchange and its executives, including Sam Bankman-Fried), seeking a declaration that the company's holdings of digital assets belong to customers, Tom Hals and Dietrich Knauth reported for Reuters.


Photo Insert: The lawsuit is the latest legal effort to lay claim to the dwindling assets of FTX, which is already feuding with liquidators in the Bahamas and Antigua as well as the bankruptcy estate of Blockfi.



The lawsuit is the latest legal effort to lay claim to the dwindling assets of FTX, which is already feuding with liquidators in the Bahamas and Antigua as well as the bankruptcy estate of Blockfi, another failed crypto company.


FTX pledged to segregate customer accounts and instead allowed them to be misappropriated and therefore customers should be repaid first, according to the lawsuit filed in US Bankruptcy Court in Delaware.



"Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda," said the complaint.


Bankman-Fried has acknowledged risk-management failures at FTX but said he does not believe he has criminal liability. He has not yet entered a plea and was released on a $250 million bond last week that included restrictions on his travel.


All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

Bahamas-based FTX halted withdrawals last month and filed for bankruptcy after customers rushed to pull their holdings from what was once the second-largest cryptocurrency exchange after questions surfaced about its finances.


The US is also probing how $370 million was hacked after the company went bankrupt. Bankman-Fried faces charges stemming from what a federal prosecutor called a "fraud of epic proportions" that included allegedly using customer funds to support his Alameda Research crypto trading platform.



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