FTX Sues Company Founder for Over $1 Billion in Misappropriated Funds
On the morning of July 21, Beijing time, the cryptocurrency exchange FTX sued the company founder Sam Bankman-Fried (Sam Bankman-Fried) and some former executives, hoping to recover more than 1 billion US dollars, which was embezzled before FTX went bankrupt.
Caroline Ellison, who once managed the Alameda Research hedge fund founded by Fried, was named as the defendant. Former FTX Chief Technology Officer Gary (Zixiao) Wang and former FTX Engineering Director Nishad Singh also became defendants.
FTX accused the defendants of improperly misappropriating funds for the purchase of luxury apartments and political donations. They also made speculative investments and even invested in pet projects that turned into serious financial frauds. According to FTX, the transfer of funds occurred from February 2022 to November 2022, when FTX had filed for bankruptcy protection. According to US law, the transfer can be revoked or avoided.
U.S. prosecutors have said Fried was the mastermind behind the fraud that led to FTX’s bankruptcy and the embezzlement of billions of dollars in customer funds.
Freed has pleaded not guilty to several criminal charges, but other defendants have pleaded guilty and are willing to cooperate with prosecutors.