FTX founder Sam Bankman-Fried was first arrested and then released on bail this month. A host of other developments related to the exchange, its sister company Alameda and its executives have shaped up recently.
Now, according to reports, the DoJ has launched an investigation to look into the abnormal FTX hack. Parallelly, other court documents revealed that SBF borrowed $546 million from Alameda to buy Robinhood shares.
Now, FTX customers have jointly filed a class action lawsuit against the crypto exchange and its former top executives. They are seeking a declaration that the company’s holdings of digital assets belong to customers.
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FTX Customers Seek Priority Rights
Per the lawsuit filed in the US Bankruptcy Court in Delaware, the exchange pledged to segregate customer accounts. However, it allowed them to be misappropriated and therefore customers should be repaid first, the lawsuit noted. Furthermore,
“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 represents more than 1 million exchange customers in the United States and abroad. The customers want the court to specifically find the property held at Alameda, that is traceable to its userbase.
Alongside, the class action lawsuit seeks a declaration from the court that funds held in the exchange’s US accounts for US customers and in trading accounts for non-US customers or other traceable customer assets are not FTX property.
Nevertheless, if the court rules that it is the exchange’s property, then the customers are looking forward to a verdict that they have a priority right to repayment over other creditors.
Also Read: What are the odds of FTX users recovering funds?