On Tuesday, customers of the defunct crypto exchange FTX sued the exchange and its former CEO, Sam Bankman-Fried, in a class action lawsuit to recover funds lost when the platform collapsed. This class action complaint was filed in the US Bankruptcy Court in Delaware by four plaintiffs on behalf of millions of former FTX customers who claim that the company’s digital assets are theirs and that they should have priority access to those funds.
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.
The Complaint said
The lawsuit is the most recent attempt in the legal system to stake a claim to the diminishing assets of FTX, which is already engaged in a legal dispute with liquidators in the Bahamas and Antigua as well as the bankruptcy estate of Blockfi, an additional unsuccessful cryptocurrency exchange. Customers hurried to remove their assets from the Bahamas-based FTX, which was formerly the second-largest cryptocurrency exchange, when suspicions about its finances arose last month.
The proposed class seeks a declaration that traceable customer assets are not FTX property, on behalf of more than 1 million FTX customers in the United States and internationally. According to the lawsuit, the customer class also wants the court to clearly rule that anything kept at Alameda that can be traced back to consumers is not Alameda property.
After it was revealed that Bankman-Fried moved billions of dollars of consumer money to support Alameda, FTX and 130 other connected firms filed for Chapter 11 bankruptcy and halted customer withdrawals in November.
