FTX Sues SBF and Executives for Alleged $1 Billion Misappropriation
In Brief
FTX has started a legal battle against its very own founder, Sam Bankman-Fried, and executives Caroline Ellison, Zixiao “Gary” Wang, and Nishad Singh.
The exchange aims to reclaim over $1 billion that was allegedly misappropriated before FTX’s unfortunate bankruptcy.
FTX has filed a lawsuit against its founder, Sam Bankman-Fried (SBF), and three former executives. The cryptocurrency exchange seeks to recover over $1 billion allegedly misappropriated before FTX’s bankruptcy.
Among those named in the complaint are Caroline Ellison, the leader of SBF’s Alameda Research hedge fund, Zixiao “Gary” Wang, the former technology chief, and Nishad Singh, who held the position of FTX’s engineering director. Each of them now faces a formidable legal challenge as they attempt to defend their alleged roles in what FTX contends were improper transactions.
The lawsuit was filed in the United States District Court for the District of Delaware on July 20, 2023.
According to the complaint, “fraudulent transfers worth over a billion dollars were made for the benefit of Defendants during the period February 2020 to November 2022.”
The complaint alleges that the defendants engaged in many fraudulent and illegal activities, including:
- Transferred assets out of FTX Trading Ltd to other entities in the FTX family of companies without adequate consideration.
- Entered contracts with third parties that were designed to benefit the defendants at the expense of FTX Trading Ltd.
- Made false and misleading statements to investors about the financial situation of FTX Trading Ltd.
- Wasted corporate assets by engaging in unnecessary and excessive expenses.
“As alleged in the indictment, Bankman-Fried’s “multi-billion-dollar fraud” was executed through a series of systems and schemes that allowed Bankman-Fried and other FTX executives to access and steal FTX customer deposits without detection,”
the complaint said.
The complaint also raises questions about the cryptocurrency market regulation, which has allowed numerous fraudulent and illegal activities.
Caroline Ellison, Gary Wang, and Nishad Singh pleaded guilty to charges of securities fraud, money laundering, and conspiracy to violate campaign finance laws. The charges stem from their alleged involvement in a scheme to inflate the price of FTT, FTX’s cryptocurrency. On the other hand, SBF has pleaded not guilty to the same charges. He is going to trial in October.
Read more:
- CFTC unveils new charges against Sam Bankman-Fried, FTX, and Alameda
- As Sam Bankman-Fried’s FTX empire comes crumbling down, Solana faces immense public scrutiny
- FTX Has Been Hit With Over $120 Million in Advisor Fees as the Costs of Bankruptcy Continue to Rise
- FTX Bankruptcy Lawyers Seek $323 Million Recovery from FTX Europe Leadership
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About The Author
Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on agnec@mpost.io.
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Agne is a journalist who covers the latest trends and developments in the metaverse, AI, and Web3 industries for the Metaverse Post. Her passion for storytelling has led her to conduct numerous interviews with experts in these fields, always seeking to uncover exciting and engaging stories. Agne holds a Bachelor’s degree in literature and has an extensive background in writing about a wide range of topics including travel, art, and culture. She has also volunteered as an editor for the animal rights organization, where she helped raise awareness about animal welfare issues. Contact her on agnec@mpost.io.
