FTX Launches Lawsuit Against Ex-Executives, Including Sam Bankman-Fried, to Reclaim $1 Billion
Now-defunct cryptocurrency exchange FTX has filed a complaint against former CEO Sam Bankman-Fried and other key executives to retrieve more than $1 billion in allegedly misappropriated funds.
The lawsuit, filed by FTX under the direction of an executive team led by restructuring expert John Ray, named former Alameda Research CEO Caroline Ellison, FTX co-founder Gary Wang, former FTX engineering director Nishad Singh, and Bankman-Fried as defendants.
The complaint alleged that FTX executives breached their fiduciary duties by misappropriating customer funds on a “continuous basis to finance luxury condominiums, political and ‘charitable' contributions, speculative investments and other pet projects.
One stance FTX lawyers mentioned in the lawsuit was Bankman-Fried's $10 million gift to his father, distinguished legal scholar Joe Bankman.
The lawsuit claimed that the amount was routed from FTX to Bankman-Fried’s Morgan Stanley and TD Ameritrade accounts around January 2022.
Likewise, the attorneys alleged that Bankman-Fried and Wang used customer funds to purchase $546 million worth of shares in the trading platform Robinhood.
As reported, these shares became a center of contention with four entities laying claim to them.
Bankrupt crypto lender BlockFi, which is also an FTX creditor, FTX's new management, as well as the US government wanted to keep a grasp of the shares.
However, the US Department of Justice eventually retained control of the shares.
The lawsuit also claimed that Ellison paid herself $28.8 million in bonuses and used $10 million of the funds to purchase a stake in an artificial intelligence company.
The filing said many of the alleged fraudulent transfers occurred while the exchange was insolvent.
While FTX
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