FTX sues its own founder Sam Bankman-Fried to recover over $1 bn
FTX founder Sam Bankman-Fried after appearing before a magisterial court in the Bahamas
FTX, the defunct cryptocurrency exchange, has sued its own founder Sam Bankman-Fried and three former executives to recover over $1 billion they are accused of misappropriating before the collapse of FTX last year.
The lawsuit has been filed in Delaware bankruptcy court.
FTX lawsuit against Sam Bankman-Fried: What does it entail?
Bankman-Fried has been accused of pilfering money through a $10 million gift to his father Joe Bankman.
The lawsuit has been reportedlybrought by FTX under the guidance of a restructuring expert named John Ray. Ittargets a series of share awards, real estate acquisitions and cash transfers among others that the company, currently undergoing a restructuring process, saysshould be undone in accordance with the US bankruptcy law.
Who all are named in FTX lawsuit?
Other than the FTX founder Sam Bankman-Fried,Caroline Ellison, the former head of FTX's trading arm Alameda Research is among the individuals accused of benefiting from the transactions in the lawsuit.
One incident cited in the complaint involves Ellison reportedly granting herself a $22.5 million bonus, part of which was later transferred to a personal bank account and then invested in an Artificial Intelligence company, Financial Times reported.
Zixiao "Gary" Wang, a co-founder of FTX, and Nishad Singh, who worked at FTX and Alameda, are also named as beneficiaries of the purportedly illicit money transfers.
Ellison, Wang, and Singh have already pleaded guilty to unrelated fraud charges in criminal cases, while Bankman-Fried has pleaded not guilty to US criminal charges that include fraud, money laundering, and campaign finance violations.
FTX lawsuit against Sam Bankman-Fried: What does it mean?
This latest lawsuit by FTX represents a new effort by John Ray and his team to reclaim assets reportedlyowed to creditors of the cryptocurrency exchange.
Also watch |Former FTX founder Sam Bankman-Fried arrested in Bahamas after US files charges
Among these creditors are thousands of individual customers who lost access to their assets when FTX halted withdrawals before declaring bankruptcy in November.
The FTX lawyers are searching remaining assets of the company in an effort to recover as much money as possible for defrauded creditors.
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