FTX Victims Pursue Asset Recovery through Criminal Forfeiture
Various factions are currently in a legal battle over the assets associated with the criminal case against Sam Bankman-Fried, the former CEO of FTX, who is now serving a 25-year federal prison sentence. On June 14, attorneys for the FTX debtors and the Bahamian branch of the firm, known as FTX Digital Markets, filed a motion in the United States District Court for the Southern District of New York. They argued that they have a “superior right” to the assets in question, which could be used to meet the court’s $11 billion judgment against Bankman-Fried.
The legal team asserted that FTX’s aircraft, funds held at various banks, the sale proceeds of Robinhood shares, and political donations linked with former FTX executives should not be used to cover Bankman-Fried’s judgment. Instead, these assets should be directed to benefit the victims of the now-defunct exchange. According to the filing, amending the Preliminary Forfeiture Order to return these assets to the debtors and FTX Digital Markets would serve all creditors and stakeholders involved in the Chapter 11 bankruptcy proceedings and FTX Digital’s liquidation in The Bahamas.
The petition emphasized that distributing the value of these specific assets to more than a million victims of Bankman-Fried’s criminal activities is a monumental task. They believe that handling this distribution through the existing claims administration system would maximize the available funds by minimizing additional administrative and professional expenses.
On the same day, two other petitions were filed by attorneys representing the company and the joint liquidators of Emergent Fidelity Technologies. This firm held over 55 million shares of Robinhood for Bankman-Fried and FTX co-founder Gary Wang. Their petition was more focused, aiming solely at the Robinhood shares and $20 million held by Emergent, rather than the broader array of FTX assets claimed by other debtors.
In a separate movement, a group of claimants, whose digital assets were allegedly stolen by Sam Bankman-Fried, filed a petition demanding that the forfeited assets in the criminal case be handed over to FTX users instead of the debtors. They were represented by crypto lawyers Adam Moskowitz and David Boies, and the group included Sunil Kavuri, an FTX customer who testified against Bankman-Fried. They argued that the Bankruptcy Estate’s conflicts could compromise the fair distribution of the forfeited FTX customer assets.
As of the article’s publication date, Judge Lewis Kaplan had yet to make a decision regarding a potential hearing or judgment on these three petitions. In May, FTX’s bankruptcy case in the District of Delaware introduced a proposed reorganization plan aimed at reimbursing creditors. This plan has faced objections, including from Kavuri, who claimed it didn’t adequately address losses incurred due to U.S. taxes.
Bankman-Fried was found guilty on seven felony counts related to the misuse of customer funds between FTX and Alameda Research. In March, Judge Kaplan sentenced him to 25 years in prison. Although Bankman-Fried’s lawyers have filed a notice of appeal, he remains in the Metropolitan Detention Center in Brooklyn as the appeals process takes its course.
Other key figures associated with both FTX and Alameda Research, such as Gary Wang, Caroline Ellison, and Nishad Singh, have pleaded guilty and are awaiting sentencing after providing testimony at Bankman-Fried’s trial. Ryan Salame, the former co-CEO of FTX Digital Markets, was sentenced to 90 months this past May. Salame did not testify at Bankman-Fried’s trial and is expected to begin his prison term on August 29.
39 thoughts on “FTX Victims Pursue Asset Recovery through Criminal Forfeiture”
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Judge Kaplan needs to make a decision ASAP The victims can’t wait forever!
Yawn Another day, another court filing. When will they focus on what really matters?
The tenacity of the legal team in this case is inspiring. Let’s see those assets returned where they belong. 🚀🤞
Every step forward in this case is a win for the victims! Keep it up!
These legal petitions are key to ensuring the victims receive proper compensation. Well done to the attorneys!
So important that the assets go to the victims and not get lost in endless litigation. Stay strong, everyone.
This never-ending legal battle over FTX’s assets is incredibly frustrating How long will it take to sort this mess out?
Great to see multiple petitions aligning for the common goal of compensating victims. Strength in unity! ✨🎇
Why do they keep filing petitions? Can’t they see how much harm this causes to those who lost everything? 🤬
Seriously? They need more courtroom drama? Focus on compensating the victims and stop the bureaucratic nonsense!
Hats off to the legal team fighting for whats right! Victims deserve every penny of those assets.
Sending good vibes to everyone involved in making sure these assets benefit the victims. You’re doing amazing work!
Ugh, these factions are only complicating things further Why can’t they just put the victims first?
The greed here is just disgusting 🤢 Everyone wants a piece of the pie and the real victims get nothing.
Such a tangled web of legal proceedings, but the objective is clearcompensate the victims!
The victims of this mess need all the support they can get. Great to see efforts being made to get the assets to them.
Will this ever end?! The longer they fight, the less there will be for the actual victims
It’s so crucial that the assets benefit the victims and not get swallowed up by legal fees!
FTX victims need all the help they can get. Kudos to the legal team for pushing this forward!
This legal battle is intense, but it’s heartening to see efforts being made to return assets to victims. Stay strong, everyone! 💪
The complexity of this case is mind-boggling, but it sounds like they have a solid plan to get the assets to the victims.
I doubt any of us will see a single cent from this fiasco. It’s all just theatrics at this point.
Navigating such a complex case is no small feat. Huge respect to those making sure victims come first! 🌟📜
Amazing to see such concerted efforts to make sure this money gets to those who need it mostthe victims.
This legal battle is a testament to the resilience of the FTX victims and their advocates. Keep fighting! 💪👏
Does anyone else think this is turning into a circus? The victims deserve their funds back, not more legal drama.
Incredible to see so many factions working together to prioritize the victims! 🤝🌟
Seems like the lawyers are the only ones getting rich here 😤 Just give the money back to the victims already!
It’s amazing how the attorneys are navigating through this complex situation to ensure that justice is served. 🚀💼
So relieved to see proactive efforts to compensate the victims fairly. Keep pushing forward!
Incredible work by all involved to prioritize the victims’ needs. Justice is on the way!
Ridiculous So much time and money wasted on these court proceedings instead of helping those affected.
More motions, more petitions, yet no resolution. This is dragging on way too long.
It feels like a bad soap opera at this point Can we please get some real action to help the victims?
The whole situation with FTX is just a big, ugly mess When will justice truly be served?
Glad to see the lawyers are fighting for what’s right! The victims deserve to be compensated. 💪✨
Here’s hoping Judge Kaplan makes the right call. The victims deserve justice! ✊⚖️
It’s uplifting to see legal teams fighting for the victims’ rights. Let’s hope for a favorable outcome! 🛡️📜
Finally, some positive movement towards getting the victims compensated. Let’s hope the judge sees it this way too.