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Silver Golub & Teitell LLP is investigating whether FTX Trading Ltd. ("FTX"), Alameda Research LLC ("Alameda Research"), FTX.US and their employees engaged in unlawful conduct by misappropriating customers deposits to fuel risky trading by sister company Alameda Research. FTX and Alameda Research’s conduct has caused FTX to become insolvent and will likely result in FTX customers losing billions of dollars of deposits trapped on FTX exchanges.

On November 11, 2022 digital asset trading platform FTX Trading Ltd. ("FTX"), Alameda Research LLC ("Alameda Research"), FTX.US, and related entities filed a petition for Chapter 11 bankruptcy protection (the "FTX Bankruptcy Filing") in United States Bankruptcy Court in the District of Delaware. The FTX Bankruptcy Filings culminated over a week of speculation over Twitter and in the press over FTX’s solvency and its relationship with sister trading firm Alameda Research. FTX and Alameda Research were both founded by Sam Bankman-Fried, a former quantitative trader a Jane Street Capital.

A November 2, 2022 CoinDesk exposed that 40% of the $14.6 billion in assets claimed by Alameda Research were actually FTT tokens invented and circulated by sister company FTX. Following the report, on November 7, 2022, Binance CEO Changpeng Zhou announced that due to “recent revelations”, Binance would be selling its all of its FTT tokens, which were valued at over $500 million at the time. This caused FTT’s value to plunge from over $22 to around $15 in a day.

During this time, Bankman-Fried appears to have lied in a series of now-deleted tweets about the safety of customer deposits in order to prevent a customer run on FTX deposits:

SBF Tweets

On November 8, 2022, FTX revealed it was experiencing a “liquidity crunch” after having experienced over $6 billion in 72 hours and was therefore selling itself to rival digital asset exchange Binance. After examining FTX’s balance sheet, Binance backed out of the deal, stating “[o]ur hope was to be able to support FTX’s customers to provide liquidity, but the issues are beyond our control or ability to help.”

Over the ensuing days, it was revealed that FTX had lent billions of the dollars of customer deposits to Alameda Research after Alameda Research had suffered massive trading losses. Alameda Research likely lost more money in an attempt to trade out of the hole it created, losing customers’ money forever. News reports stated that Alameda Research’s debt to FTX is approximately $10 billion.

In FTX's filing, FTX signaled intention to move for "joint administration" of the bankruptcy proceedings of all FTX entities "under the case number assigned to the Chapter 11 case of FTX Trading Ltd.") believes FTX's bankruptcy is the result of unlawful activity including, inter alia, potential violations of US Securities Laws and common law fraud. 

SGT believes former customers/users of FTX and FTX.US may have actionable legal claims against FTX, Bankman-Fried, and related parties as a result of the above-described conduct. If you are a former customer-user of FTX and wish to speak with one of our attorneys experienced in digital asset litigation, fill out the form to provide us with your information.


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