FTX sues Sam Bankman-Fried and other ex-executives to recover $1 billion

Former FTX and Alameda Research executives Sam Bankman-Fried, Caroline Ellison, Gary Wang and Nishad Singh have been named in the FTX lawsuit.

News Join us on social networks

FTX has sued former CEO Sam Bankman-Fried and other key former executives of the now bankrupt crypto exchange to recover more than $1 billion in allegedly misappropriated funds.

A July 20 lawsuit filed in a U.S. bankruptcy court named former Alameda Research CEO Caroline Ellison, FTX co-founder Zixiao "Gary" Wang, former FTX CTO Nishad Singh, and Bankman-Fried as defendants.

In the lawsuit, FTX claimed the former executives breached their fiduciary duties by allegedly misappropriating client funds "on a continuous basis to finance luxury condominiums, political and 'charitable' contributions, speculative investments, and other pet projects."

Excerpt from FTX complaint against Bankman-Fried, Ellison et al. Source: Kroll

Furthermore, the lawsuit alleged that they "abused their control" over FTX and its related companies to commit "one of the biggest financial frauds in history".

The defendants created an environment in which a handful of employees had "virtually unlimited power" to oversee transfers of fiat and crypto assets, as well as granting themselves the power to hire and fire employees without "any effective oversight" over how they exercised those powers, according to the suit.

Furthermore, FTX claimed that the former executives issued over $725 million in equity, "without [debtors] receiving any value in exchange."

FTX claimed that Bankman-Fried and Wang also embezzled an additional $546 million to buy shares of trading platform Robinhood.

The filing alleged that Ellison paid himself $28.8 million in bonuses and used $10 million of the funds to buy a stake in an artificial intelligence company...