FTX Customers File Class Action Lawsuit to Secure Crypto Holdings

Consortium of ftx customers has filed a class action lawsuit against the failed exchange, seeking confirmation that the company’s crypto holdings belong to customers. the lawsuit was filed in late november and seeks a declaration that “traceable customer assets” are not the property of ftx, including those assets held by alameda that are still traceable to customers. the ftx collapse may have impacted over 1.2 million customers in the u.s. alone, based on the firm’s reported user numbers. corporate entities, including the defunct crypto lender blockfi, are also waiting in line.

Lawsuit was heard in a u.s. district court, where judge lewis kaplan replaced ronnie abrams as the judge overseeing the criminal trial of sam bankman-fried. the judge has previously represented prince andrew, duke of york, and will oversee the eight criminal charges now facing bankman-fried. the filing said that “customer class members should not have to stand in line” with other creditors looking to share in the remaining assets of ftx group and alameda research and that these assets “should be earmarked solely for customers.”

Lawsuit alleges that ftx failed to segregate and misappropriated customer accounts, despite pledging to do so. the lawsuit seeks to ensure customers are paid first, ahead of other ftx creditors. in addition, the action seeks confirmation that the company’s crypto holdings belong to customers. the ftx and alameda research owe blockfi more than $1 billion, and ftx owes approximately $3.1 billion to its top 50 external creditors. the lawsuit is an attempt by ftx customers to ensure that their assets are not lost in the collapse of the exchange.


By Evey Lovelace

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