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07/22 04:15

FTX sues Sam Bankman-Fried

FTX sues Sam Bankman-Fried and other former execs to claw back $1B
Former FTX and Alameda Research executives Sam Bankman-Fried, Caroline Ellison, Gary Wang and Nishad Singh were named in the suit from FTX.

FTX has sued former CEO Sam Bankman-Fried and other former key executives from the now-bankrupt crypto exchange to recover more than $1 billion in allegedly misappropriated funds. 

A July 20 complaint filed in a United States Bankruptcy Court named former Alameda Research CEO Caroline Ellison, FTX co-founder Zixiao “Gary” Wang, former FTX engineering director Nishad Singh and Bankman-Fried as defendants. 

In the lawsuit, FTX claimed the former executives breached their fiduciary duties by allegedly misappropriating customer funds on a “continuous basis to finance luxury condominiums, political and ‘charitable' contributions, speculative investments and other pet projects.”20230721_102533.jpg
Additionally, the lawsuit alleged they “abused their control” over FTX and its related companies to commit “one of the largest financial frauds in history.”

Defendants created an environment in which a handful of employees had “virtually limitless power” to oversee transfers of fiat and crypto assets, as well as granting themselves the power to hire and fire employees with “no effective oversight” on how they exercised these powers, the suit claimed.

Additionally, FTX alleged the former executives issued more than $725 million worth of equity to themselves, “without [debtors] receiving any value in exchange.”

FTX claimed Bankman-Fried and Wang also misappropriated an additional $546 million to purchase shares in the trading platform Robinhood.

The filing alleged Ellison paid herself $28.8 million in bonuses and used $10 million of the funds to purchase a stake in an artificial intelligence company.

FTX also alleged that on Jan. 24, 2022, Bankman-Fried transferred $10 million as a “gift” from his FTX US account to his father's account on the same exchange.4R8fgdy.png

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