FTX Users Files Lawsuit To Receive Priority Reparations
US regulators and government agencies are waiting in line to sue the now-bankrupt FTX and its founder, SBF. Meanwhile, four FTX customers have decided to speak on behalf of the user community.
The four plaintiffs have filed a lawsuit asking the court to grant customers priority access to FTX frozen funds instead of investors.
FTX Users Ask For Priority Rights To FTX Funds
The four individuals filed the lawsuit on December 27th in the US Bankruptcy Court for Delaware District. The plaintiffs claimed that they were standing on behalf of former FTX users.
Additionally, the plaintiffs clearly stated that FTX’s user agreement does not allow the firm to use clients’ funds for any purpose like borrowing or running operations. The complaint noted that any withdrawal of users’ funds from the company account constitutes misappropriation, conversion, or impermissible co-mingling of customer property.
Therefore, all funds FTX has frozen that are part of users’ property must be used for customer refunds. The entity cannot use these funds to pay non-customer claims, expenses, or creditors.
“It is not fair that customer-class members should wait in line throughout these bankruptcy procedures alongside secured or unsecured creditors only to get a little fraction of the diminished estate assets belonging to Alameda Research and FTX Group,” the lawsuit added.
On December 27th, a Bloomberg report alleged that the US Department of Justice had initiated an investigation. According to the report, the study is to uncover the whereabouts of the $372 million worth of crypto stolen from FTX.
Unknown Perpetrator Moving Alameda Research Assets
Last month, FTX warned its users about abnormal wallet activity. According to the firm, an unidentified individual moved over 228,523 ETH from the exchange.
On November 11th, Ryne Miller, the General Counsel for FTX.US, confirmed the transaction while adding that it was unauthorized. According to Miller, the US subsidiary had taken precautions and transferred all its assets to cold wallets.
On November 20th, Elliptic, a blockchain forensics platform, stated that the amount transferred was over $477 million. The forensics firm added that the person later swapped the ETH for RenBTC.
Afterward, the perpetrator bridged it to BTC using the RenBridge service. Alameda Research acquired Ren in 2021. Previously, Elliptic alleged that perpetrators had used Ren to launder crypto worth millions of Dollars.
Meanwhile, another foul play took place recently. Crypto wallets linked to Alameda, which were inactive for weeks, became active. Someone started moving assets out of the wallet just a few days after Sam Bankman-Fried was granted bail.
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