FTX’s interim administration has filed a lawsuit against FTX Digital Markets and its Bahamian liquidators, alleging that they are unlawfully claiming the assets of the cryptocurrency exchange.
The FTX Interim Administration is seeking the intervention of U.S. Bankruptcy Judge John Dorsey to confirm that the assets of exchange founder Sam Bankman-Fried and other employees placed in the Bahamas unit were “fraudulent transfers” and, therefore, rightfully belong to FTX.
Lawyers representing the FTX Group have described the Bahamian division as an economic and legal “dummy” created as a front.
According to a statement from FTX’s interim administration, the liquidators of the Bahamas exchange “continue to make unreasonable demands that will harm FTX.com customers and other creditors.”
The liquidators of FTX Digital Markets’ Bahamian unit, which is not bankrupt, have been claiming the assets of FTX.com, as per the company’s court documents.
The collapse of FTX in November 2022 sent shockwaves throughout the cryptocurrency industry. The exchange’s founder, Sam Bankman-Fried, is facing eight criminal charges but has denied any wrongdoing. He has been released on bail of $250 million.
FTX’s interim managers were only able to recover $2.7 billion of the $11.6 billion that should have been in client accounts. A part of the shortfall can be attributed to Alameda Research, which borrowed $9.3 billion from customer accounts before the crash.
It was recently disclosed that the founders and key employees of FTX received $3.2 billion in payments and loans, mostly from a subsidiary of Alameda Research, prior to the exchange’s collapse.