• FTX is filing a lawsuit against founder Sam Bankman-Fried and other executives, seeking the return of over $1 billion in cash and shares they allegedly fraudulently transferred to themselves.
• The lawsuit alleges that these funds were used for real estate purchases, political donations, Sam Bankman-Fried’s criminal defense, and potentially an island purchase.
• Former CTO and Co-Founder Gary Wang, Director of Engineering Nishad Singh, former Alameda Research CEO Caroline Ellison, Gabriel Bankman-Fried (Sam’s brother), and Allen “Joe” Bankman (Sam’s father) are all named in the lawsuit.
FTX Files Lawsuit Seeking Return of Over $1B From Former Executives
The bankrupt crypto exchange FTX has filed a lawsuit against founder Sam Bankman-Fried and other executives seeking the return of over $1 billion in cash and shares it alleges were fraudulently transferred to themselves. The lawsuit documents how close control over FTX Group’s businesses and systems was used to perpetrate what it calls a massive fraud between February 2020 and November 2022.
Alleged Fraudulent Transfers
According to the filing, FTX issued more than $725 million worth of equity to Bankman-Fried, former CTO and Co-Founder Gary Wang, Director of Engineering Nishad Singh, and former Alameda Research CEO Caroline Ellison. Of this $725 million, $447.8 million allegedly went to Singh with no payment required or intended for the shares. In addition, FTX transferred $4.86 million for real estate purchases; Sam’s father Allen “Joe” Bankman received $10 million from Alameda for legal expenses; Gabriel Bankman-Fried planned on using FTX Foundation funds to purchase an island nation; more than $100 million in political donations were made from mixed funds including customer money; and Caroline Ellison awarded herself a bonus worth millions at the height of FTX’s crisis last November.
Actions Being Taken By Estate
The estate is now looking to recover these assets with its newly filed lawsuit against all parties involved in order to protect investors who may have been harmed by the fraudulent transfers. It seeks full restitution plus damages caused by their actions as well as court costs associated with bringing this action forward.
Criminal Charges Against Executives
In addition to civil action being taken by FTX’s estate against those involved in the alleged schemes, criminal charges may be brought forward as well depending on findings by authorities during their investigation into these matters.
Conclusion
As details continue to emerge regarding this case it will be important for investors who may have been affected by any misconduct related to these transactions or otherwise related activities brought forth during investigations surrounding them seek legal advice if necessary .