FTX Sues FTX Digital Markets’ Liquidators Citing Ownership Claims

Bankrupt cryptocurrency exchange FTX has reportedly sued the liquidators of FTX Digital Markets (FTX’s Bahamian affiliate). FTX is reportedly accusing liquidators of FTX Digital Markets (FTX DM) of claiming FTX assets’ ownership in an unreasonable manner.

Under the leadership of the new CEO John Ray, FTX’s bankruptcy team in the United States (U.S.) has reportedly initiated the said lawsuit.

In the lawsuit in question, team FTX states that the claim laid by the liquidators to FTX.com’s cryptocurrency, intellectual property, and customer relationships is unwarranted.

As per FTX, FTX DM is reportedly a “fraudulent enterprise.” FTX reportedly stated that FTX DM was organized only to act as a “local service company,” adding that FTX DM is not at all the owner of the FTX.com exchange or that of its seized cryptocurrency.

Ever since filing for bankruptcy protection on November 11, FTX and the Bahamian officials have had a rotten relationship.

The Securities Commission of The Bahamas (SCB) reportedly commenced the liquidation proceedings against FTX DM only a day prior to FTX Trading’s (and that of its over 100 affiliates) U.S. bankruptcy filing. Since that time, FTX and the Bahamian officials have been sharing heavy blows for FTX assets and access to FTX’s data.

Sam Bankman-Fried (SBF), founder and ex-CEO, FTX, is arrested on fraud charges, set to reportedly face trial in October 2023. Notably, as recently reported by FTX, SBF pulled out from FTX $2.2 billion in funds just when FTX lost customer money to the tune of $8 billion.

In related FTX news, finance YouTubers who promoted FTX are reportedly being served with a class action lawsuit. The lawsuit recipients reportedly include Graham Stephan, Andrei Jikh, Jaspreet Singh, among others.

A private investor, Edwin Garrison, is reported to have filed a lawsuit against ex-FTX CEO Sam Bankman-Fried, and prominent celebrity promoters, such as Tom Brady, Stephen Curry, Shaquille O’Neal, Larry David, Kevin O’Leary and others.

As per the lawsuit in question, it is alleged that the YouTubers participated in a civil conspiracy with FTX. The lawsuit reportedly states that the intention of these YouTubers was to mislead customers “with the false impression that any cryptocurrency assets held on the FTX Platform were safe and were not being invested in unregistered securities.”