The FTX Recovery Trust, a legal entity established to manage the bankruptcy estate of FTX Trading Ltd. following its collapse in November 2022, has recently filed a lawsuit aiming to reclaim more than $1 billion in funds that its former CEO, Sam Bankman-Fried, had sent. In a filing dated September 22, which was made at the US Bankruptcy Court for the District of Delaware, the FTX Recovery Trust submitted a complaint against the crypto mining company Genesis Digital Assets (GDA), its associates, and two co-founders. According to the complaint, they were trying to recover $1.15 billion that was mixed up and improperly used. Additionally, the filing pointed out that these funds were connected to Bankman-Fried’s scam scandal against clients and other creditors at FTX in 2021 and 2022. Sam Bankman-Fried finds himself in trouble again with a scam scandal Concerning the FTX Recovery Trust’s complaint , Sam Bankman-Fried had ordered FTX’s sister cryptocurrency trading firm, Alameda Research, headed by CEO Caroline Ellison, to purchase GDA shares at very high prices exceeding $500 million for just 154 preferred shares. Apart from this, reliable sources also revealed that the CEO purchased shares of GDA for around $550.9 million after he directly sent money to Rashit Makhat and Marco Krohn, the Co-Founders at GDA. Following the situation, the filing highlighted that by 2021, Bankman-Fried had successfully transferred billions of dollars in customer funds from FTX.com exchange to Alameda. During this act, the CEO made Alameda spend more than $1.15 billion on expensive GDA shares despite escalating debt to FTX.com. On the other hand, the complaint highlighted that the transfers were purposefully meant to benefit Bankman-Fried personally. For the 90% owner of Alameda, his share of the act was nearly all the profits from GDA’s inflated value and potential success (for both GDA and Bitcoin). He was supposed to pass losses onto the FTX Group’s creditors and customers to achieve this. The FTX Recovery Trust aims to recover funds as a result of Bankman-Fried’s actions The lawsuit against Genesis Digital followed the FTX Recovery Trust’s efforts to regain funds connected to the collapse of the exchange. FTX filed for bankruptcy in 2022, and several former executives, such as Bankman-Fried, are currently in prison. Bankman-Fried’s imprisonment came after he ignored obvious warning signs and believed in lies while investing in Genesis Digital. At that time, the company in Kazakhstan experienced an energy crisis. It also offered Bankman-Fried false financial documents. In the meantime, a bankruptcy court approved a $175 million settlement in 2023 in which Genesis Global Trading — which has no relationship to GDA — agreed to pay FTX. After over two years in bankruptcy court, the FTX Recovery Trust began paying out creditors in February. The plan began with a $1.2 billion payout to claimants and another $5 billion distribution in May. It is due to release $1.6 billion to creditors on September 30. As earlier reported by Cryptopolitan in the first round, Julian Grigo, head of institutions and fintech at asset custody, said some creditors may have been unhappy. Reimbursements offered relief to some customers, he said, but concerns lingered because most holders stand to get only a fraction of their original assets — and those repayments are tied to the prices at the time of the exchange’s collapse. Bitcoin-related repayments have been of particular dispute, since they apply to November 2022 valuations, i.e., when BTC was trading at around $20,000. Its price has since skyrocketed to between $90,000 and $112,000. KEY Difference Wire : the secret tool crypto projects use to get guaranteed media coverage
