As part of its ongoing bankruptcy case, FTX’s affiliated firm, Alameda Research, has filed a lawsuit to reclaim over $11 million in funds held in a Crypto.com account. This account, linked to FTX’s 2022 bankruptcy filing, has been frozen, and Alameda is now seeking a court order to release the locked assets.
Alameda’s Legal Actions to Unlock Assets
In a filing submitted on November 7 to the U.S. Bankruptcy Court for the District of Delaware, Alameda requested that Crypto.com transfer approximately $11.4 million in account assets back to the debtors. This account, initially opened under the name Ka Yu Tin, was frozen by Crypto.com following FTX’s bankruptcy filing, and Alameda has since claimed that the exchange has “wrongfully withheld” these funds. The filing includes a declaration from former Alameda CEO Caroline Ellison, who confirmed that the account’s assets belong to Alameda. This statement, made on November 1, came just before Ellison began her prison sentence in Connecticut due to her involvement in FTX’s mishandling of customer funds.
Previous Efforts to Recover Locked Funds
This lawsuit follows Alameda’s recent legal move against crypto exchange KuCoin to access around $50 million in frozen assets. KuCoin had previously restricted the funds, citing “suspicious activities.” Together, these actions reflect Alameda and FTX’s commitment to recovering frozen funds held across various platforms as part of FTX’s bankruptcy process.
FTX’s Bankruptcy and Repayment Plan for Users
FTX’s bankruptcy, filed in November 2022, left creditors and investors in doubt over potential reimbursements. However, nearly two years into the proceedings, the bankruptcy court has approved a plan to reimburse 98% of users, amounting to roughly 119% of the value of their claimed assets at the time of the bankruptcy. This repayment plan will calculate reimbursements based on the 2022 crypto asset prices, disregarding potential gains in assets like Bitcoin. Although this plan is approved, the exact timeline for user repayments remains unclear.
Criminal Cases Involving FTX Executives
In parallel to the bankruptcy case, multiple criminal cases against former FTX executives have reached conclusions. Former Alameda CEO Caroline Ellison, ex-FTX CEO Sam Bankman-Fried, and former co-CEO of FTX Digital Markets, Ryan Salame, are all serving prison sentences. Nishad Singh, the former director of engineering, received a sentence of time served, while FTX co-founder Gary Wang’s sentencing is scheduled for November 20.
