FTX, the bankrupt crypto exchange founded by Sam Bankman-Fried, has initiated legal action to reclaim over $11 million linked to its affiliated firm, Alameda Research, from an account held on Crypto.com. The lawsuit, filed on November 8, asserts that the funds in question are held in an account registered 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 accounts in employees’ names, a practice FTX says was used to “mask its trading activities.” The filing alleges that despite the account being opened under Tin’s name, Alameda was responsible for funding and managing the account. This suggests that the company maintained control over these assets.
Following Alameda’s collapse, Crypto.com reportedly locked this account. This allegedly restricted the bankrupt exchange’s administrators from accessing the funds. FTX alleges that Crypto.com has repeatedly denied its requests, citing discrepancies between the account 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 supporting FTX’s claims. Ellison testified that the Crypto.com accounts were indeed named under Alameda affiliates or other associated individuals.
She also asserted that Alameda viewed the assets held in these accounts as company property. According to Ellison, “the assets in the Alameda Account, 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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