On Tuesday, it was reported that customers of the defunct cryptocurrency exchange FTX filed a class action lawsuit against the business and its founder Sam Bankman-Fried and several top officials. They are asking for a ruling that the customers own the digital assets held by FTX. According to Reuters, this is the most recent legal effort to establish a claim on FTX’s declining assets. According to reports, the company is already at conflict with the bankruptcy estate of Blockfi, another failing cryptocurrency business, as well as liquidators in the Bahamas and Antigua.
FTX had promised to segregate customer accounts but had instead allowed them to be misused
Customers should be compensated first, the lawsuit filed in US Bankruptcy Court in Delaware claims. FTX had promised to segregate customer accounts but had instead allowed them to be misused. According to the complaint, “consumer class members should not have to stand in line in these bankruptcy procedures alongside secured or general unsecured creditors only to share in the diminished estate assets of the FTX Group and Alameda.”
The once promising company last month filed for bankruptcy
It requests a statement that traceable consumer assets do not belong to the corporation on behalf of more than a million FTX customers in the US and overseas. They also want the property to be held in Alameda and be able to be tracked back to the clients. Customers should have priority over other creditors when it comes to repayment in the event that the court determines that the aforementioned assets are genuinely FTX property.
The once promising FTX last month filed for bankruptcy halting withdrawals after customers rushed to pull holdings. Its founder Bankman-Fried is facing charges for a “fraud of epic proportions” that allegedly included appropriating customer funds to support his Alameda Research crypto trading platform.