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id: 438, Created by Mr Cryptoinspector, Scout
FTX Fraud Case
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Now ANY CRYPTO INVESTOR who was damaged directly or “indirectly” by FTX collapse can JOIN CASE!
On 9 November 2022, several bad news came out on the FTX situation:
- WSJ reported that Binance would not move forward with the deal to acquire FTX because of the Exchange's mishandling of customer funds and pending investigations.
- FTX website said that it was not processing withdrawals.
On this and preceding news, FTX Token (FTT) price dropped over 85% for 3 days and lost over $ 2.2 billion of its capitalization, seriously damaging investors.
The situation was getting worse on November 2, 2022, when the first "deal-breaking" news came out:
- CoinDesk reported that a significant portion of Alameda Research's assets were FTT tokens. Seeking to prop up Alameda, which held almost $15 billion in assets, Bankman-Fried transferred at least $4 billion in FTX funds, secured by assets including FTT.
- Several days later on November 7, Zhao said Binance would sell its entire share in the token, FTT, worth at least $580 million, “due to recent revelations that have come to light.”
- But on November 8, 2022, Zhao announced that Binance had entered into a non-binding agreement to purchase FTX due to a "liquidity crisis" at FTX.
- The next day the offer was withdrawn.
- On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the U.S., according to a company statement posted on Twitter. Bankman-Fried has also stepped down as CEO. At the beginning of the year, investors estimated the Exchange at $32 billion, and the wealth of the creator of the exchange exceeded $17 billion.
The situation with FTX damaged many Retail and Institutional investors, not only in FTT but the overall crypto market which lost double digits billions for several days. As several media reported, Investors that could lose money in FTX case include such big names as Tiger Global Management, the Ontario Teachers’ Pension Plan, SoftBank Group, Sequoia Capital, Lightspeed Venture Partners, Temasek Holdings, Tom Brady, and many others.
Taking all representations, announcements, and involved parties' interconnections into account, Investors damaged by the ongoing situation have all grounds to suspect:
- FTX and Alameda's Leaders and Shareholders in fraud and breach of fiduciary duties,
- Involved parties, including Binance, that could intentionally influence the situation by manipulating the FTX token price.
Failure to Disclose,
Breach of Fiduciary duty,
Shock Event Date
08 November 2022
21 May 2023
Status: Awaiting Decision on Lawsuits Consolidation.
- Investors have filed many FTX lawsuits across the USA, with many in California and Florida.
- Some plaintiffs filed a motion to transfer all lawsuits related to the FTX collapse to the Southern District of Florida.
- The pending multidistrict litigation has been assigned MDL No. 3076 and has been titled “In Re: FTX Cryptocurrency Exchange Collapse Litigation.”
The Next Milestone: The U.S. Judicial Panel on Multidistrict Litigation to decide whether to consolidate the FTX class-action lawsuits and individual investor lawsuits into one multidistrict litigation (MDL). The hearing date is planned on May 25, 2023.
15 June 2023
FTX Debtors’ Customer Claims Portal will be launched on or around July 3, 2023.
Web Site: https://claims.ftx.com/
21 June 2023
NEWS | FTX | Silvergate Bank and its CEO are attempting to dismiss a collective lawsuit filed by customers of the bankrupt cryptocurrency exchange FTX, asserting that they had no obligation to the FTX customers since they were not Silvergate customers. The defunct bank maintains that it holds no responsibility in this matter.
27 June 2023
FTX | News | Source: Bloomberg
"FTX Lied to Banks About Commingled Funds, Management Alleges.
- Exchange commingled client funds since inception, new CEO says.
- Current management has recovered $7 billion in liquid assets."
17 August 2023
Important $FTT News:
- In a legal arrangement disclosed in court documents, FTX's Alameda Research is eligible to pursue a claim valued at $175 million from the estate of Genesis, a crypto firm currently undergoing bankruptcy proceedings.
- As part of the deal, Genesis relinquishes its corresponding claims against FTX, marking a noteworthy decrease from FTX's initial pursuit of nearly $4 billion.
- The intention behind this arrangement is to facilitate the resolution of affairs for both companies and facilitate the return of funds to customers.
29 August 2023
$FTT Case Update:
A Delaware bankruptcy judge approved procedures for streamlined settlements of litigation claims held by FTX Trading Ltd. but capped the value of claims eligible for the quick deals at $15 million.
31 August 2023
FTX Case News:
A judge said that $FTT founder Sam Bankman-Fried can't stop prosecutors from relying on recently produced evidence at his upcoming fraud trial, calling the defendant's complaints of unfair delay "not at all accurate."
06 September 2023
$FTT case-related News:
FTX has been actively bridging tokens from various blockchains back to their native blockchains. FTX has also been migrating SOL and other tokens from existing wallets to BitGo, FTX’s qualified custodian. (Source: FTX)
07 September 2023
$FTT case-related News:
The $175 million settlement proposal between bankrupt crypto firms Genesis Global Holdco and FTX is encountering renewed resistance from Genesis's creditors and Gemini Trust Co., co-founded by Tyler and Cameron Winklevoss, who criticized the agreement as an effort to manipulate the voting process for the plan.
07 September 2023
Former FTX CEO Ryan Salame is set to enter a guilty plea in the Manhattan federal court in connection with the multi-billion-dollar $FTT fraud case against the crypto exchange's founder Sam Bankman-Fried.
08 September 2023
$FTT Case Update:
- Former FTX CEO Ryan Salame admitted guilt, acknowledging charges related to collaborating with Sam Bankman-Fried to make fraudulent political donations worth tens of millions, aimed at supporting the struggling crypto exchange.
- He pleaded guilty without any agreement to cooperate against his former boss.
11 September 2023
FTX is exploring the option of recovering the millions of dollars it paid to famous athletes and sports teams for endorsing $FTT before its bankruptcy.
12 September 2023
FTX is planning to approve the relaunch plan (FTX 2.0) in Q2 2024. An asset recovery process is in progress.
12 September 2023
- The bankruptcy estates of FTX Trading, Alameda Ventures Ltd., and FTX U.S. have initiated a legal action in Delaware bankruptcy court.
- Their objective is to reclaim over $100 million transferred from the debtors to LayerZero Labs Ltd., a Virgin Islands-based entity, along with its former chief operating officer and another entity, shortly before the collapse of FTX.
13 September 2023
- A federal judge in Manhattan denied FTX founder Sam Bankman-Fried's request for release from jail to prepare for his trial in three weeks.
- The judge ruled that he was unconvinced by the unsupported claims made by the crypto boss, stating that he can not access electronically stored discovery materials while detained in a Brooklyn detention center.
15 September 2023
- A Delaware bankruptcy judge granted FTX approval to engage an investment manager and proceed with the sale of up to $100 million in cryptocurrency.
- This decision comes a week after the proposal received support from both official and unofficial unsecured creditor groups.
19 September 2023
New FTX Tentative Settlement:
Jaguars' Trevor Lawrence and two other influencers reportedly have reached a settlement with FTX customers over allegations they promoted the collapsed crypto exchange.
22 September 2023
- Top distressed-debt investors are buying FTX claims cheaply, expecting valuable assets to be uncovered during the bankruptcy process.
- Silver Point Capital, Diameter Capital Partners, and Attestor Capital have purchased over $250 million of FTX debts this year, awaiting $FTT relaunch.
25 September 2023
Fenwick & West LLP, along with numerous celebrities implicated in investor claims linked to the downfall of FTX, have submitted a request to a federal court in Florida seeking the dismissal of the lawsuit filed against them.
29 September 2023
SBF Denied Release Amidst Embezzlement
- A federal judge in Manhattan rejected the release of Sam Bankman-Fried from custody ahead of his trial.
- The judge cited concerns about the FTX founder potentially facing a lengthy sentence if found guilty of embezzling billions from the collapsed crypto exchange, deeming him a possible flight risk.
02 October 2023
The SEC Sues Accounting Firm Over FTX Audits
- The SEC initiated a lawsuit in Florida against an accounting firm that had previously audited FTX before the cryptocurrency exchange's widely-publicized bankruptcy.
- The SEC alleges the firm conducted multiple reviews between 2017 and 2020 that did not adhere to auditor independence regulations.