The lawsuit asserts cash and other assets held by customers “never belonged to FTX or Alameda.”
The lawsuit filed Tuesday petitioned a judge in Delaware bankruptcy court to rule that remaining FTX assets belong to customers instead of the company. The plaintiffs say they should be compensated for their losses before other creditors.
“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,” the complaint said. The lawsuit asserted that cash and other assets held by customers “never belonged to FTX or Alameda” and should not be used to repay the platform’s many creditors. The fleeced customers are seeking class action status on behalf of more than one million FTX clients around the world.
Disgraced FTX founder Sam Bankman-Fried faces eight federal charges carrying up to 115 years in prison. The feds allege that Bankman-Fried bilked customers out of billions in funds that were misappropriated for use by FTX executives and to cover losses at the sister cryptocurrency trading firm Alameda Research.Sam Bankman-Fried is currently under house arrest.The filing is one of several efforts underway to seek restitution following FTX’s implosion.
FTX’s downfall has further destabilized a cryptocurrency sector already reeling this year from the impact of worsening economic conditions and a months-long selloff. Solana, a cryptocurrency once backed by Bankman-Fried, was down more than 12% on Wednesday and has lost a whopping 94% of its value this year,
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