FTX customers filed a class action lawsuit demanding priority in refunds.
The case was filed in the bankruptcy court, where the company’s bankruptcy proceedings continue. These customers, who suffered financial losses following bankruptcy, should not have to queue up with other creditors to get their funds back, according to the lawsuit.
FTX Customers Request Priority
Caroline Ellison, former CEO of Alameda Research, admitted that FTX client funds were misused to close financial gaps at Alameda Research. Favacılar said the illegal transfers to Alameda Research “directly violate FTX’s own client agreements and terms of service, as well as general law and fundamental principles of honesty and fair dealing.”
A committee representing creditors was formed for more than 100 companies that invest in the stock market and have no collateral.
Sam Bankman-Fried, co-founder of FTX and Alameda Research, has faced multiple fraud charges that could lead to 115 years in prison. Ellison and FTX co-founder Gary Wang pleaded guilty to criminal and civil charges earlier this month, adding to the pressure on SBF.