Victims of disgraced former FTX CEO Sam Bankman Freed’s fraud are seeking a ruling that the failed crypto exchange’s seized assets belong to its customers, not its bankruptcy estate, calling it a “second act of theft.”
In May, the bankruptcy estate was suggested The restructuring plan allows 98% of creditors to receive 118% of their claims in cash within 60 days of court approval. The plan was submitted during the “crypto winter” when the prices of most digital currencies plummeted.
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Victims’ attorneys Adam Moskowitz and David Boies said the bankruptcy proceedings have left “many FTX customers feeling disgruntled and robbed. Many of the victims believe the proceedings are a “second theft” and that “FTX’s bankruptcy estate remains the same fraudulent legal entity as the FTX run by Bankman Freed.”
In early November, Bankman Freed was convicted of five counts of conspiracy and two counts of wire fraud and sentenced to 25 years in prison.
CoinDesk report:
FTX collapsed in November 2022. Lawyers said the jury found that SBF stole at least $8 billion from FTX’s clients. Bankman Freed, who was also ordered to forfeit $11 billion, plans to appeal the verdict and conviction. “But for the crimes for which SBF was convicted – the theft and misappropriation of client assets – clients would own their cryptocurrency investments today,” the complaint states.
The filing also notes that bankruptcy law requires certain creditors to be given priority over others, and holders of FTX’s FTT token are low in priority. “It is unlikely that holders of such tokens will receive any compensation from the foundation,” the report states.
“We don’t know what the damage will be because a full calculation hasn’t been done,” Moskowitz told CoinDesk.
Sean Moran is a policy reporter for Breitbart News. Follow him on Twitter. Sean Moran 3.
