Sam Bankman-Fried’s FTX dragged to court by investors

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Blockchain
Sam Bankman-Fried’s FTX dragged to court by investors

Investors have filed a lawsuit against FTX, demanding compensation for their losses. 

FTX faces more woes

As authorities in the US prosecute Sam Bankman-Fried and his cohorts, investors have filed a lawsuit demanding speedy compensation for their losses.

According to a court document published on Dec. 27, four plaintiffs, namely: Austin Onusz, Cedric Kees van Putten, Nicholas J. Marshall, and Hamad Dar, have filed an Adversary Complaint for Declaratory Judgement and Violations of Common Law at the United States Bankruptcy Court for the District of Delaware, on behalf of all FTX customers.

Through the lawsuit, the plaintiffs seek full refunds of their assets held on the collapsed FTX exchange first before the company settles its investors and non-customers creditors.

A section of the lawsuit states:

“At its simplest, this Adversary Proceeding is necessary because the 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.”

It added:

“Cash and assets traceable to customers, which never belong 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 debtors,”

Interestingly, Zhu Su, Co-Founder, CEO and CIO of the now-defunct Three Arrows Capital, also shed light on the current situation via Twitter.

In related news, fresh reports have it that FTX used North Dimension, a mysterious fake electronics retail company, to channel large chunks of customers’ funds to its subsidiary, Alameda Research. Part of these funds was used to purchase Robinhood shares.

Sam Bankman-Fried is currently facing trial for money laundering, wire fraud, and several other allegations. If convicted, he could spend up to 115 years in jail. 

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Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.