To recover $157.3 million, the bankrupt crypto exchange FTX has filed a lawsuit against former Hong Kong affiliate company employees.
According to court documents, defunct cryptocurrency exchange FTX filed a lawsuit on September 21 against former employees of Hong Kong-based company Salameda, which was previously affiliated with the FTX group.
In its court filing, FTX claims that $157.3 million was fraudulently withdrawn in the hours preceding the exchange’s bankruptcy filing.
Michael Burgess, Matthew Burgess, and their mother, Lesley Burgess, as well as Kevin Nguyen, Darren Wong, and two other companies, allegedly held ownership of companies with registered accounts on FTX.com and FTX US and withdrew funds during the “preference period” before FTX’s bankruptcy filing.
The filing states:
“Each of these transfers to Defendant Michael Burgess was made with the intent to hinder, delay or defraud FTX US’s present or future creditors.”
It also emphasizes that these transfers were accomplished before November 8, 2022, when FTX halted all non-fiat user withdrawals. Mathew Burgess is accused of pressuring FTX employees to “push out” specific pending withdrawal requisitions “from one of Michael Burgess’s FTX US exchange accounts, while misrepresenting the account to be his own,” with Slack messages as evidence.
This development occurs while former FTX CEO Sam Bankman-Fried (SBF) is incarcerated, anticipating the start of the first of his two-part trial on October 3, 2023. The date for the second trial is March 2024.
The judges denied SBF’s request for early parole on September 21. He argued that he could not adequately prepare for trial from prison, which violated his First Amendment rights under the Constitution of the United States. The same day, Judge Lewis Kaplan granted the Department of Justice’s motion to exclude the testimony of the SBF’s principal witnesses.
