A class action lawsuit filed by four people made an attempt to get their money back before the government agencies lined up to suit the FTX and its founder Sam Bankman-Fried.
In the United States Bankruptcy Court for the District of Delaware, the complaint was submitted on December 27. There might be up to 1 million former FTX customers in the class that four plaintiffs claim to represent. The priority rights to restore digital assets owned by FTX US or FTX.com to its clients are what the action seeks to recoup.
The plaintiffs stress that the FTX User Agreement does not authorize the platform to borrow money from customers or utilize consumer cash for running costs. The lawsuit states that any withdrawal of money from client accounts constitutes “unlawful co-mingling, misappropriation, abuse, or conversion of customer property.”
Therefore, until consumers are paid back, any monies frozen by FTX and traceable as customer property cannot be used to pay non-customer expenditures, claims, or creditors.
“Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda.”
A recent inquiry into the whereabouts of nearly $372 million in lost digital assets from FTX has been opened by the Department of Justice. FTX alerted consumers to unusual wallet activity on Nov. 12 in the midst of its bankruptcy and internal breakdown about at least 228,523 Ether moved out of the exchange from an unidentified offender.
Just days after SBF was freed on a $250 million bail, money started to flow out of the cryptocurrency wallets connected to the now-bankrupt trading firm Alameda Research, the sister business of FTX, raising suspicions of more foul activity.
