- The ongoing legal battles following the collapse of cryptocurrency exchange FTX have taken a new direction.
- In a critical move, FTX creditors are pushing for the forfeiture of assets previously held by Sam Bankman-Fried (SBF).
- Lawyers argue these assets rightly belong to the victims, reflecting the broader fight over crypto asset ownership.
FTX creditors intensify efforts for justice by targeting Sam Bankman-Fried’s assets, arguing rightful ownership belongs to customers.
FTX Creditors Seek Forfeiture of Sam Bankman-Fried’s Assets
Legal representatives for FTX creditors, Adam Moskowitz and David Boies, have filed a petition with Judge Moore in Florida aiming to seize assets tied to Sam Bankman-Fried, the beleaguered founder of the collapsed exchange. The petition seeks to recover properties and funds allegedly connected to SBF, proposing these resources be returned to creditors whose investments were lost in the FTX debacle.
Lawyers Assert Asset Ownership Belongs to Customers
The legal arguments from FTX creditor attorneys stress that the contested assets are rightfully the customers’, not part of the FTX bankruptcy estate. According to Sunil Kavuri, a representative for the creditors, these claims are reinforced by the terms of service and corroborated even by some insiders at FTX.
Creditors argue that their cryptocurrency holdings can be directly traced back to investments managed by SBF. By highlighting the connection between customer funds and the assets in SBF’s possession, the creditors aim to secure a legal verdict that favors the restitution of these resources to their original owners.
Challenges to FTX’s Restructuring Plan
The legal teams of Moskowitz Law Firm and Boies Schiller Flexner LLP, representing thousands in the multi-district litigation against FTX, have raised objections to the currently proposed reorganization plan for FTX Trading Ltd. and its associates. They criticize the recovery figures presented in the plan as deceptive, arguing they do not account for the rise in cryptocurrency values since the initial filing date, thus failing to meet congressionally mandated transparency requirements.
Push for Cryptocurrency-Based Compensation
FTX creditors, represented by Sunil Kavuri, have also challenged the notion of settling debts in their dollar equivalents as of the bankruptcy filing. Instead, they advocate for compensation directly in cryptocurrency, aligning with the current market values to ensure fair restitution. This approach, they argue, would offer a more just outcome reflective of the significant appreciation in crypto asset values.
Conclusion
The efforts by FTX creditors to reclaim assets from Sam Bankman-Fried represent a critical step in addressing the fallout from the exchange’s collapse. By challenging the proposed restructuring plans and advocating for the rightful return of customer assets, the creditors aim to ensure a fair resolution. As these legal proceedings continue, the outcomes will shape the future landscape of crypto asset recovery and investor protection.
