FTX, the bankrupt crypto exchange founded by Sam Bankman-Fried, has initiated legal action to reclaim over $11 million linked to its d firm, Alameda Research, from an held on Crypto.com. The lawsuit, filed on November 8, asserts that the funds in question are held in an ed under Ka Yu Tin, also known as Nicole Tin, who the defunct crypto exchange claims was acting as a representative for Alameda.
About FTX’s Lawsuit Against Crypto.Com
According to the filing, Alameda Research, prior to its bankruptcy, regularly operated under aliases or opened s in employees’ names, a practice FTX says was used to “mask its trading activities.” The filing alleges that despite the being opened under Tin’s name, Alameda was responsible for funding and managing the . This suggests that the company maintained control over these assets.
Following Alameda’s collapse, Crypto.com reportedly locked this . This allegedly restricted the bankrupt exchange’s s from accessing the funds. FTX alleges that Crypto.com has repeatedly denied its requests, citing discrepancies between the holder’s name and the individuals seeking to retrieve the assets.
Hence, the collapsed exchange claims it has provided sufficient documentation and clarified any complexities involved in the case, yet says that Crypto.com remains uncooperative.
The former CEO of Alameda Research, Caroline Ellison, submitted an affidavit ing FTX’s claims. Ellison testified that the Crypto.com s were indeed named under Alameda s or other associated individuals.
She also asserted that Alameda viewed the assets held in these s as company property. According to Ellison, “the assets in the Alameda , valued at approximately $11.4 million as of the Petition Date, are not of inconsequential value or benefit to the estate and must be returned to the Debtors.”
Recovery Efforts
In an attempt to boost its recovery efforts, the bankrupt estate is also invoking claims involving companies related to Crypto.com’s parent entities, Foris MT and Iron Block. Both companies had previously filed claims against the collapsed exchange for $18.4 million and $237,800, respectively, funds that were held on the FTX platform before the exchange’s collapse. Citing these claims, FTX has requested that Crypto.com’s claims be deferred until the $11 million in Alameda assets on Crypto.com’s platform is released.
The exchange is now seeking a legal resolution to secure the recovery of the disputed funds, alongside additional relief, including coverage for legal expenses. The suit underscores the exchange’s ongoing efforts to maximize asset recovery amid its ongoing bankruptcy proceedings.
Meanwhile, it’s also important to not that the disgraced exchange’s co-founder Gary Wang has appealed for no prison time, citing his help in the incarceration of Bankman-Fried. Whilst, Ellison has began serving her 2-year sentence with also forfeiting $11 billion, as ordered by the court.
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