FTX Wants $11M in Assets Back from Crypto
Alameda Research, an affiliate of cryptocurrency exchange FTX, filed a lawsuit to claw back $11.4 million held in an account with Crypto.com. The filing is part of the extensive effort by FTX to recover all assets and pay back creditors and users following the collapse of the crypto exchange.
Complaint filed in Delaware Bankruptcy Court
On November 7, a complaint was filed by Alameda in the U.S. Bankruptcy Court in Delaware. In the complaint, it is alleged that Crypto.com has held onto $11.4 million in assets since 2022 and has failed to turn over said assets to Alameda despite repeated requests for release. Alameda now seeks an order for Crypto.com to turn over the assets that it purports are rightfully its property.
Account and Allegations of Non-Cooperation
The account in question was reportedly registered under “Ka Yu Tin” and set up before them declared bankruptcy in 2022. Alameda alleges that Crypto froze the account upon FTX’s Chapter 11 filing and has “refused to cooperate with the Debtors’ requests,” improperly retaining the funds and thus prolonging the asset recovery process.
Statement by Former Alameda CEO
Former Alameda chief executive Caroline Ellison confirmed the ownership of the assets in a declaration filed on November 1, days before reporting to prison. In the statement, Ellison declared that the $11.4 million in the Crypto.com account belongs to Alameda, underlining the firm’s position in its claim against the exchange.
Larger Scale Attempts at the Recovery of Tied-up Assets
This complaint is part of a line of several legal motions by Alameda and FTX’s representatives in trying to claw back frozen assets. In October, Alameda filed a similar complaint against crypto exchange KuCoin, seeking nearly $50 million in locked money, which KuCoin reportedly froze due to “suspicious activities.” Efforts in this regard remain paramount, for them plans to recover funds toward its repayment plan.
Bankruptcy Repayment Plan Progress
After being in bankruptcy proceedings for nearly two years, FTX outlined a plan that would reimburse creditors. The deal will ultimately return users about 98% of their claimed assets, according to crypto values from 2022, when FTX filed bankruptcy. For FTX, this compensation plan is a significant marking point in the effort to regain value for its users.
Development of the Criminal Case
The legal fallouts for the executives of them continue. Former CEO Sam Bankman-Fried, ex-CEO of Alameda Caroline Ellison, and co-CEO of FTX Ryan Salame are in prison. Co-founder Gary Wang will be sentenced in late November and, in effect, closes the criminal cases stemming from the collapse of FTX.
