FTX Launches Major Lawsuits to Recover Lost Funds
FTX intensifies its recovery efforts with 20 new lawsuits, targeting political donations and alleged fraud to reclaim millions in lost assets.
FTX has intensified its legal efforts, filing over 20 new lawsuits aimed at recovering assets tied up in political donations, fraudulent investments, and market manipulation. These recent legal actions target various individuals and companies, including prominent names like 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 in the past few weeks alone, marking a significant escalation in their attempt to reclaim funds.
Among the key issues is FTX’s focus on recovering political contributions allegedly made using customer funds. FTX is targeting 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. He noted that the timing, intent, and financial condition of the donor play a crucial role 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 legal action against Nawaaz Mohammad Meerun, known as "Humpy the Whale," who allegedly caused more than $1 billion in losses through market manipulation. FTX accused Meerun of repeatedly violating exchange rules, leading to substantial financial damage for both FTX and its trading arm, Alameda Research. Meerun’s activities are alleged to have forced Alameda to cover risky positions, resulting in hundreds of millions of dollars in additional losses.
In its pursuit of asset recovery, 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 push to address substantial losses linked to various entities and recover as much as possible from the massive financial collapse.
