Connect with us


FTX and Alameda sue SBF and co



FTX and Alameda have filed a suit against a list of its former management team. This includes the former CEO, Sam Bank-Friedman; Nishad Singh, co-founder of WRS and WRSS; and Gary Wang, co-founder of Alameda, WRS, and WRSS.

The allegations are coming a few months after the exchange went bankrupt in a series of financial scandals levied against SBF. 

It is also worth noting that FTX is taking the first court action against SBF under the leadership of John Ray III. John Ray III took over the helm of the company after the bankruptcy recovery professional was appointed to lead it following its crash under SBF.

Alameda is a British Virgin Islands company, subsidiary of Alameda Research LLC. WRS (West Realm Shires) is a Delaware corporation with 52.99%, 16.93%, 7.83%, and 22.5% owned by SBF, Wang, Singh, and other shareholders, respectively. WRSS (West Realm Shire Services) is a business that operates as FTX.US, and is a subsidiary of WRS.  

Allegations made

According to the suit, the defendants are accused of defrauding investors, creditors, and customers to make self-dealing transfers that were used to acquire Embed, a fintech firm; and carelessly dealing with retention bonuses that led to overpayment of equity holders of Embed.

SBF and co were also accused of creating false records on the role Alameda played in the acquisition of Embed; misleading FTX.US Exchange “Transfers” which were recorded as flowing from Alameda exchange account to defendants’ exchange accounts to WRS exchange account instead of from Alameda Bank Account to WRSS bank account to WRS exchange account to Embed equity holders.

Other allegations included hiding the fact that no bidder was willing to buy Embed for more than $1 million after WRS paid $220 million for it; the acquisition of Embed was done when the insolvency was close and FTX insiders were aware; and the transfers were done to defraud creditors. The suit includes eleven counts against the defendants as well. 

The prayers of the plaintiff are that the court should declare that the transfers and fraudulent acts done were avoidable. It also added that the court should award the plaintiff the transferred WRS common stock, declare restraints on any and all claims filed or held by defendants until defendants relinquish to the plaintiffs the amount ordered as an award for avoidable transfers.

Other prayers are that the court  should award the plaintiffs their attorneys’ fees, pre-and post-judgment interests, and costs of suit; and all other relief, at law or equity, to which they may be entitled.

Post FTX collapse

After the collapse of the exchange, Sam Bankman-Fried, the founder and CEO of FTX, stepped down from his position in November 2022. The company hired new executives, including Brett Harrison, the former president of BitMEX. It also implemented new security measures, such as requiring users to complete Know Your Customer (KYC) verification. 

Read also;

FTX case: for the good of crypto or to protect politicians?

SBF accepted FTX was “self-destruct” – SBF’s mentor

0 0 votes
Article Rating
1 Comment
0 0 votes
Article Rating
Notify of

1 Comment
Newest Most Voted
Inline Feedbacks
View all comments

Crypto News Update

Latest Episode on Inside Blockchain

Crypto Street



ALL Sections

Recent Posts

Would love your thoughts, please comment.x