FTX Files Over 20 Lawsuits to Recover Assets After Bankruptcy
FTX has intensified legal efforts, filing over 20 new lawsuits to recover assets related to political donations, fraudulent investments, and market manipulation. These actions target various individuals and companies, including former White House Communications Director Anthony Scaramucci and the team behind the video game Storybook Brawl. Since November 2022, FTX’s bankruptcy administrators have initiated 51 adversary actions, with 30 filed recently, marking a significant escalation in asset recovery attempts.
Key issues involve recovering political contributions allegedly funded by customer funds. FTX targets donations to left-leaning groups, claiming they were funded fraudulently. Thomas Braziel, founder of 117 Partners, explained that under U.S. bankruptcy law, donations made with fraudulent intent or without equivalent value may be subject to recovery. The timing, intent, and financial condition of the donor are critical factors in determining if a donation can be “clawed back.”
One high-profile case involves Anthony Scaramucci, whom FTX is suing for over $100 million. The exchange also took action against Nawaaz Mohammad Meerun, known as "Humpy the Whale," who allegedly caused over $1 billion in losses through market manipulation. FTX accused Meerun of violating exchange rules, leading to substantial financial damage for both FTX and its trading arm, Alameda Research. Meerun's activities allegedly forced Alameda to cover risky positions, resulting in hundreds of millions in additional losses.
In its recovery pursuit, FTX's legal team has also filed lawsuits against centralized exchanges like Crypto.com and KuCoin, aiming to secure funds belonging to the failed platform. The legal actions reflect FTX’s determined effort to address substantial losses linked to various entities and reclaim funds from the financial collapse.