A collection of consumers are currently suing FTX to become the pioneers in recovering assets from the cryptocurrency exchange. The petition filed wants the courts to realize that the holdings with the exchange platform belong to the users and not the collapsed company.
Four FTX users filed a petition against the crypto exchange and its previous co-founders. Following the suit, FTX filed for bankruptcy protection as customers and investors hurried to pull out their assets.
Moreover, after several legal attempts to lay a claim to the funds of FTX, its new administration announced that it would refund users first. The current complaint maintains that users do not have to stand in line with convicted executives in these bankruptcy cases and share in the collapsed assets of the FTX exchange platform.
Following Bankman-Fried resignation as Chief Executive Officer of FTX, plus his extradition from the Bahamas, his now facing fraudulent charges in the United States. Among them is an allegation that user deposits in crypto and fiat are used to support his crypto exchange platform.
Lawsuit claims on FTX co-founders
Let alone Mr. Bankman Fried, users file petitions to sue Caroline Ellison, Banksman’s Fried ex-girlfriend, and co-founder. They claim that both should be held accountable for converting customers’ holdings.
Caroline Ellison pleads guilty to these fraudulent charges. In her defense, she confirmed that Alameda had access to an exceptional lending facility, FTX user funds. The filed petition wants the courts to recognize that the funds and assets held in these reserves do not belong to FTX but solely belong to users instead.
The petition aims to represent more than a million FTX users in the United States and around the globe. However, when the courts declare that the holdings belong to FTX, then the users strive for a ruling from the judges allowing them access rights to refund over other creditors of the exchange, which was among the top crypto industries before its collapse in the previous month.
Following these events, a source conversant with the case exposed that the department in charge of Justice in the United States has launched an investigation into a suspected cyberattack on FTX that resulted in the loss of more than 370 million dollars just hours after the bankruptcy court filing.
However, whether that was inside work or a hacking event still needs to be clarified. Moreover, FTX’s chief executive officer Mr. Bankman Fried is supposed to enter a plea the following week to fraudulent charges, defrauding customers, and getting away with billions of dollars in users’ assets at his collapsed FTX exchange.
Presently, Mr. Bankman is supposed to be arraigned before United States District Judge Lewis Kaplan in Manhattan Federal court next week, January 3rd, 2023.