FTX Users File Lawsuit In Bankruptcy Proceedings Seeking Priority Repayment And Damages

Key Points:

• According to court documents filed on Thursday, a group of FTX consumers is requesting that they receive payment first in the ongoing bankruptcy procedures.
• Sam Bankman-Fried, is charged with a crime in the United States, while Gary Wang and Caroline Ellison, two other executives, have admitted guilt to accusations of fraud.

According to court documents filed on Thursday, a group of FTX consumers is requesting that they receive payment first in the ongoing bankruptcy procedures.

Former FTX executives are charged with intentionally misusing customer funds to fund risky strategies and an opulent lifestyle in The Bahamas “in direct violation of FTX’s customer agreements and terms of service,” according to a class action lawsuit filed with the U.S. Bankruptcy Court for the District of Delaware (the same court where the cryptocurrency exchange filed for Chapter 11 bankruptcy protection in November).

“FTX Executive Defendants failed to institute any corporate controls and were therefore able to cause, direct or allow the misappropriation of billions of dollars in customer funds and digital assets deposited or held worldwide at FTX,” the filing says.

Sam Bankman-Fried, is charged with a crime in the United States, while Gary Wang and Caroline Ellison, two other executives, have admitted guilt to accusations of fraud.

Customers of FTX want “priority to the repayment of customer property,” and they want the court to rule that any customer property held on behalf of customers does not belong to the company. These customers are the plaintiffs in the new class action lawsuit, exchange customers Austin Onusz, Cedric Kees Van Putten, Nicholas J. Marshall, and Hamad Dar, and “all others similarly situated.”

They also ask for unspecified damages, which will be assessed in a jury trial.

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