FTX Steps Up Asset Recovery Efforts
FTX is using legal action against various parties and other methods as part of its asset recovery efforts. Led by Chief Executive and Restructuring Officer John J. Ray, the bankrupt cryptocurrency exchange is aiming to recoup billions of dollars, Bloomberg reported Friday (Sept. 22). In one recent development, FTX filed a lawsuit against FTX founder Sam Bankman-Fried’s parents, Allan […]
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FTX is using legal action against various parties and other methods as part of its asset recovery efforts.
Led by Chief Executive and Restructuring Officer John J. Ray, the bankrupt cryptocurrency exchange is aiming to recoup billions of dollars, Bloomberg reported Friday (Sept. 22).
In one recent development, FTX filed a lawsuit against FTX founder Sam Bankman-Fried’s parents, Allan Joseph Bankman and Barbara Fried, on Monday (Sept. 18), seeking to recover millions of dollars of what it said were fraudulently transferred and misappropriated funds, according to the report. The lawsuit alleges that Bankman and Fried used their access and influence within FTX to enrich themselves at the expense of the company’s debtors and creditors.
FTX Trading Ltd. also filed a lawsuit against four former employees of Salameda Ltd., an FTX affiliate based in Hong Kong, on Thursday (Sept. 21), the report said. The company is aiming to recoup $153 million in transfers that the employees received just before the collapse of the crypto trading platform. The FTX complaint said these employees are accused of prioritizing the withdrawal of their funds and digital assets once it became clear that FTX was in trouble.
Meanwhile, distressed-debt investors are closely monitoring FTX’s bankruptcy proceedings, per the report. These investors have purchased over $250 million worth of FTX debts, betting on the possibility of uncovering additional valuable assets during the lengthy bankruptcy process.
Some funds that FTX is attempting to recover are not the result of legal action, according to the report. For example, Stanford University, where Bankman and Fried taught, announced its plans to return millions of dollars it received from FTX and related entities. The announcement followed the filing of the suit against Bankman and Fried. Court documents reveal that the university received gifts totaling around $5.5 million from FTX-related entities between November 2021 and May 2022.
Ray brings significant experience in turnarounds and restructuring to the table, the report said. Having successfully recovered over $828 million for creditors during the Enron bankruptcy, Ray is now leading the asset recovery efforts for FTX.
However, Bankman and Fried have criticized Ray’s team, calling the claims against them false and highlighting the substantial legal fees incurred by the efforts, per the report.
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