FTX ramps up asset recovery ahead of Bankman-Fried’s trial
FTX intensified its asset recovery operations under legal scrutiny as founder Sam Bankman-Fried prepares for his October trial in October.
Spearheaded by FTX Chief Executive and Restructuring Officer John J. Ray, the company aims to reclaim billions of dollars that were lost.
In a recent development, the exchange initiated legal proceedings against the parents of Bankman-Fried. The litigation accused Allan Joseph Bankman and Barbara Fried of manipulatively siphoning off “millions of dollars” by exploiting their familial connection and influence within the company, thereby defrauding creditors and stakeholders.
FTX is chasing funds across borders
Additionally, FTX Trading Ltd targeted former associates in Hong Kong with legal action. The company is seeking to claw back $153 million in assets from four ex-employees of Salameda Ltd, an affiliated Hong Kong-based corporation. These individuals are alleged to have given preferential treatment to their own funds and digital assets when the platform’s financial instability became evident last fall. The complaint was filed in the U.S. Bankruptcy Court for the District of Delaware.
High-profile distressed debt investors haven’t shied away from the unfolding drama. Firms like Silver Point Capital, Diameter Capital Partners, and Attestor Capital have acquired over $250 million in FTX debts since the start of the year. These companies are wagering that the protracted bankruptcy procedures will unveil additional lucrative assets, as revealed by Bloomberg’s court record examination.
But lawsuits aren’t the sole avenue for asset retrieval. In a rather surprising move, Stanford University has volunteered to repay several million dollars it had received from FTX and its connected entities. These donations, amounting to approximately $5.5 million, were made between November 2021 and May 2022; ; Bankman-Fried’s parents were professors at Stanford Law School.
As the date of Bankman-Fried’s trial approaches, FTX is pulling no punches in its aggressive pursuit of lost assets. With billions at stake, and the eyes of the financial world closely watching, the outcome of these legal endeavors may very well define the future of centralized exchanges and the broader landscape of the crypto industry.
