There's Never a Dull Week at FTX, It Seems: the Old, the New, Sue You
FTX is allegedly going to reboot, but former employees are already building a new exchange. An employee is suing, while the bankruptcy estate sues Bybit to recover funds.
Since its epic collapse last November, FTX seems to have been permanently in the news spotlight. It seems that the notorious exchange is far better known now than it ever used to be. No publicity is bad publicity, so they say. This is what they've been up to lately.
Despite ongoing bankruptcy proceedings, there is a good chance that it could rise from the ashes. While the exchange tries to recover assets to pay customers back, it is also evaluating proposals from potential bidders to revive its status as an active crypto exchange. Its most valuable asset is its vast customer database. The winning bid is expected to be announced in December 2023, with the exchange likely to resume operations by mid-2024. Some experts suggest that it might be one of the critical factors in a significant rise in Bitcoin’s value over the next year.
Meanwhile, two former colleagues of the disgraced SBF aren't waiting to see if they can get their old jobs back, instead building their own new crypto exchange "dedicated to the ideals and principles the industry stands for." FTX’s former general counsel, Can Sun, and former Alameda Research software developer, Armani Ferrante, have started Trek Labs, which will operate under the name of Backpack, a Web3 wallet earlier founded by Ferrante. The exchange has already secured a license in Dubai.
It isn't just customers who are trying to retrieve money from the FTX collapse. Ross Rheingans-Yoo, an employee from the FTX charity foundation, who claims he was not a part of the “inner circle” and knew nothing about FTX’s internal workings, is suing the company for $275,000, representing the unpaid share of his claimed 2022 salary bonus. FTX claims Ross has already been fully paid via options in the firm’s corporate affiliates, which he denies.
While employees sue FTX, FTX sues other companies. The FTX bankruptcy estate filed a lawsuit against Bybit, trying to recover almost $1 billion transferred to its investment arm, Mirana, just before the collapse. The lawsuit claims that Bybit took advantage of its VIP status to pressure FTX employees to fulfil its withdrawal requests. According to the lawsuit, Mirana “had advantages over the average customer, and used every such advantage in furtherance of a fraudulent scheme to have its withdrawal requests prioritized over those of other customers.” The lawsuit also targets some individuals, including the Mirana executive Sean Tan.
And what about the main instigator? Despite Sam Bankman-Fried being found guilty on all seven charges and facing up to 100 years in prison, his legal woes aren't over yet. It has been suggested that prosecutors will proceed with a second trial regarding an alleged Chinese bribe and campaign finance violations.
Just another week for FTX.
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