FTX Launches $1B Lawsuit against Sam Bankman-Fried and Former Executives

The bankrupt cryptocurrency exchange, FTX has sued its Founder and former Chief Executive Officer Sam Bankman-Fried in an attempt to recover USD $1 billion. The funds are part of a larger sum of money allegedly misappropriated prior to the collapse of the company. Additionally, the lawsuit, which was filed before a bankruptcy court in Delaware, mentioned Caroline Ellison, the former Chief Executive Officer of Alameda Research, Zixiao Gary Wang, FTX's former Chief Technology Officer, and Nishad Singh, the company's former Engineering Director as defendants in the lawsuit. FTX's Lawsuit Allegations Ellison, Wang, and Singh have since surrendered themselves to the authorities and pleaded guilty to accusations including conspiracy to commit fraud and money laundering and violation of campaign finance laws. However, Bankman-Fried pleaded not guilty to all the charges related to the collapse of FTX in January and is set to face trial in October. FTX's lawyers have accused the defendants of allegedly using money to fund political parties, acquire luxurious real estate properties, and invest in speculative trading. According to the document filed before the court, the alleged fraudulent activities were committed between February 2020 and November 2022, when FTX declared bankruptcy.Besides that, the lawsuit accused the defendants of failing to observe good corporate governance and putting their personal goals and aspiration ahead of that of the exchange. Additionally, the lawsuit highlighted a lack of effective corporate controls in FTX.Additional Accusations "The defendants created an environment in which a handful of employees had virtually limitless power to direct transfers of fiat currency and cryptocurrency and to hire and fire employees with no effective oversight and no checks on how they exercised those broad powers," FTX explained. Finance Magnates reported yesterday (Thursday) that FTX's bankruptcy lawyers were planning to recover USD $71 million invested by the defunct exchange in life science companies. The lawyers said that the donations were not driven by philanthropic intentions but to gain Bankman-Fried political influence and goodwill. Moreover, the bankruptcy team is planning to recover USD $323 million paid to the leadership of FTX Europe. Meanwhile, reports emerged yesterday (Thursday) about a possible phishing attack targeting FTX's users. As reported by Coindesk, the exchange's users have been receiving suspicious password reset emails from the company's official support email address. This article was written by Jared Kirui at www.financemagnates.com.