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FTX Lawsuit: Exchange Sues Former Employees of Affiliate Company

FTX Lawsuit: Exchange Sues Former Employees of Affiliate Company

The recently bankrupted cryptocurrency exchange, FTX, has officially filed a lawsuit on September 21st against former employees of Salameda, a Hong Kong-incorporated company affiliated with the FTX group. The lawsuit aims to recover $157.3 million from those involved in preferentially or fraudulently transferring assets prior to bankruptcy proceedings.

Read More: Ex-FTX Executive Ryan Salame to Plead Guilty in Criminal Case

Proceedings of the FTX Lawsuit

FTX alleges that former Salameda employees Michael Burgess, Kevin Nguyen, Darren Wong, and Matthew Burgess—along with Lesley Burgess and two other FTX-related firms—had withdrawn assets from and FTX US accounts during the 90-day period leading up to FTX’s Chapter 11 bankruptcy protection filing in November. Court documents reveal these transactions took place involving digital assets and fiat currency.

The allegations also include Matthew Burgess pressuring FTX employees to expedite specific pending withdrawal requisitions from one of Michael Burgess’s FTX US exchange accounts, while misrepresenting the account as his own. The filing cites messages exchanged on the popular communication platform, Slack, as evidence.

Read More: FTX Lawsuit: Exchange Owns $1.72B in Crypto, $200M in Real Estate

Lesley Burgess, the mother of both Michael and Matthew Burgess, allegedly benefited from these connections. She successfully withdrew assets just hours before the exchange suspended withdrawals on November 8, 2022.

The recent lawsuit filed by FTX against former employees and affiliates of Salameda highlights the necessity for greater transparency and accountability within the cryptocurrency industry. Whether or not FTX can recover the $157.3 million, only the future will tell. However, the outcome of this case could serve as a cautionary tale for future crypto exchanges and their employees.

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Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.


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