FTX Trading Pursues Over $1 Billion in Lawsuit Against Founder

FTX Trading filed a new lawsuit against disgraced founder Sam Bankman-Fried and other former executives on Thursday, July 20, to recover more than $1 billion in questionable transactions.

FTX filed a complaint in the Delaware bankruptcy court, naming co-founder and chief technology officer Gary Wang.

In addition, Nisha Singh, the former director of engineering, and Caroline Ellison, the former co-chief executive officer of Alameda Research LLC, are also named in the lawsuit.

These defendants are accused of fraudulent transactions that benefited them personally rather than the exchange.

FTX alleged that the defendants consistently misappropriated funds to finance opulent condominiums, political contributions, speculative investments, and other personal endeavors.

According to the corporation, this led to “one of the largest financial frauds in history.”

For example, the complaint alleges that Bankman-Fried and Wang stole $546 million from Alameda in May 2022 to purchase Robinhood Markets Inc. shares.

They allegedly furnished Alameda with fraudulent loans requiring no collateral and lower-than-usual interest rates.

The lawsuit claims that only Ellison authorized the loans.

SBF, Wang, and Singh are accused of using fraudulent loans to acquire $250 million worth of FTX stock at the time.

During FTX’s current and ongoing bankruptcy procedure, John Ray is in charge of the company.

Under his direction, the exchange attempts to recover improperly transferred funds by the platform and his allies at FTX.

The lawsuits are part of a larger strategy devised by FTX’s new CEO, John Ray, and his team to recover funds and repay creditors, including customers who lost cryptocurrency when the exchange failed in November.

FTX is utilizing bankruptcy laws to recover payments made before its Chapter 11 filing.

This year, the current FTX board intends to resume the exchange’s operations. Any success SBF and its allies have in recovering the funds will expedite the process of making a comeback.

Bankman-Fried has declared his innocence of the criminal allegations. Ellison, Wang, and Singh, on the other hand, have pleaded guilty and are cooperating with prosecutors.