A group of FTX clients filed a Delaware bankruptcy court case seeking priority in recovering their funds. The complaint dated December 27 is posted on Kroll’s site.
The defendants are the exchange itself, its U.S. subsidiary, founder Sam Bankman-Fried (SBF), and Alameda Research.
According to the filing, the user agreement did not permit the platform to use customer funds for its own purposes, including to cover operating expenses.
The plaintiffs characterized such conduct as ‘illegal appropriation’. They stressed that their assets ‘never belonged’ to the Bankman-Fried entities and should be returned on a priority basis.
“Class members should not have to stand in line for recoveries alongside creditors in the bankruptcy process merely to divide the dwindling assets of the FTX Group and Alameda,” the suit says.
In November, the exchange’s new CEO John Ray III accused Bankman-Fried and other former executives of concealing improper use of customer funds and of secretly exempting Alameda Research from certain aspects of the platform’s auto-liquidation protocol.
Earlier Bloomberg sources reported that the U.S. DOJ initiated an investigation into the withdrawal of funds from FTX.
According to court documents, SBF and co-founder Gary Wang borrowed $546.4 million from Alameda Research to purchase a 7.6% stake in Robinhood.
In December, U.S. resident Joey Gonzalez filed a class-action lawsuit against Silvergate Bank over the alleged role in transferring user FTX deposits to Alameda Research accounts.
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