FTX Ramps Up Legal Actions With 20 Lawsuits Targeting Political Donations and Fraud

The supervisor carried out supervision on November 8 FTX’s chapter has introduced greater than two dozen new lawsuits, rising authorized motion towards a number of entities.

These lawsuits point out a concerted effort by FTX to recuperate belongings from a number of firms and people. Since November 2022, FTX debtors have filed 51 counterclaims, 30 of which have been filed in current weeks.

FTX targets $1 billion in losses with new lawsuits

In accordance with paperwork from the FTX chapter docket, the latest filings relate to varied claims, together with political contributions, the corporate’s defunct inventory alternate philanthropic efforts, investments and allegations of market fraud and manipulation.

“FTX goes after dozens of left-wing teams for all donations fraudulently made with buyer cash,” mentioned a creditor of FTX.

Thomas Braziel, founding father of 117 Companions, acknowledged that FTX might recuperate some donations underneath US chapter regulation. He famous that cash will be recovered if it was donated with fraudulent intent or doesn’t have equal worth. As well as, donations made whereas the donor was bancrupt are at explicit danger of being recovered.

“Not all donations are immune. Trustees will look carefully on the debtor’s intentions, timing and monetary situation when deciding whether or not a charitable switch will be recovered,” Braziel mentioned.

FTX new lawsuits. Supply: X/SFTXunil Kavuri

Along with the nonprofits, the failed authorized crew is pursuing different outstanding figures and entities. The property has filed a lawsuit towards former White Home communications director Anthony Scaramucci and his firm, looking for greater than $100 million in damages. One other lawsuit targets the crew behind Storybook Brawl, a online game that FTX co-founder Sam Bankman-Fried invested in and promoted.

FTX additionally filed a big clawback case towards Nawaaz Mohammad Meerun, referred to as “Humpy the Whale,” who allegedly prompted greater than $1 billion in losses by way of market manipulation. Earlier this yr, Humpy led a governance assault on the DeFi protocol Compound Finance, inflicting vital losses to the platform.

“Meerun additionally repeatedly violated FTX’s guidelines, forcing Alameda to take over Meerun’s dangerous positions and incur a whole lot of tens of millions of {dollars} in extra losses. All informed, FTX and Alameda have suffered roughly $1 billion in losses on account of Meerun’s crimes, and Meerun has used the proceeds from his exploits to fund a variety of different legal actions,” FTX alleged.

These authorized actions replicate FTX’s rising efforts to recuperate belongings from quite a few people and firms. Over the previous week, the alternate has taken authorized motion towards main centralized exchanges corresponding to Crypto.com and KuCoin over funds belonging to the platform.