There are new developments from the cryptocurrency exchange FTX, which is currently undergoing bankruptcy proceedings. Accordingly, it initiated legal action against former employees of its Hong Kong-based subsidiary, Salameda. The lawsuit states that these former employees were involved in preferential or fraudulent asset transfers. It also claims that FTX is trying to reclaim approximately $157.3 million in assets. This significant legal move comes at a time when FTX is facing a complex bankruptcy situation.
Former employees accused of abuse by cryptocurrency exchange
In a recent court filing, FTX named the people at the center of the case. Salameda’s former employees Michael Burgess, Kevin Nguyen, Darren Wong and Matthew Burgess are among the defendants. The lawsuit also names Lesley Burgess and two other companies affiliated with crypto exchange FTX. FTX’s allegations revolve around allegations that these individuals withdrew assets from FTX prior to bankruptcy proceedings.
Crypto exchange FTX also makes a claim based on asset pricing as of August 31, 2023. Accordingly, he claims that the assets collectively amount to approximately $157.3 million. Notably, the majority of these assets, more than $123 million, were withdrawn on or after November 7. Also included is more than $73 million allegedly fraudulently transferred to Michael Burgess.
Complex scheme revealed
The court filing details a complex scheme in which Matthew Burgess, then an employee of crypto exchange FTX Group, allegedly enlisted the help of other FTX Group employees to expedite withdrawal requests from Michael Burgess’ FTX US exchange account. According to FTX’s claims, this transaction was made by pretending to own the account. There is also a development regarding Lesley Burgess, the mother of Michael Burgess and Matthew Burgess. They took the step just hours before the FTX.com exchange halted withdrawals on November 8, 2022. Accordingly, they withdrew their assets from the stock market. They became the subject of a lawsuit for making this move.
FTX’s legal fight does not end here. The exchange also targeted the parents of cryptocurrency exchange FTX founder Sam Bankman-Fried, Joseph Bankman, and Barbara Fried in a separate lawsuit filed on Monday. This lawsuit seeks to recover funds allegedly “fraudulently transferred and misappropriated.” Bankman and Fried, both Stanford Law School professors, used their influence within FTX. It is also claimed that they enriched themselves by millions of dollars.
Impact on Stanford University
Another important development revealed by the case is the claim that FTX transferred funds to Stanford University. The court file alleges that Bankman directed donations of more than $5.5 million from cryptocurrency exchange FTX Group to Stanford University between November 2021 and May 2022. As reported by Bloomberg, Stanford University, in response to these allegations, announced that it plans to return these significant donations.
When we look at Kriptokoin.com, the legal situation of the crypto exchange FTX continues with very different developments. Accordingly, it remains a focal point within the cryptocurrency community. On the other hand, it has important consequences for the stock market and its stakeholders.
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