4 FTX customers have filed a category motion lawsuit against the company and Alameda Research in an try and recoup losses after the cryptocurrency exchange filed for Chapter 11 bankruptcy last month.
The lawsuit, filed Tuesday, asked a judge in a Delaware bankruptcy court to rule that FTX’s remaining assets belong to customers as an alternative of the company. Plaintiffs argue that they needs to be compensated for their losses before other creditors.
“Members of the client class shouldn’t line up with secured or unsecured creditors in insolvency proceedings only to share the reduced assets of the FTX Group and Alameda,” the criticism reads.
The lawsuit claimed that money and other assets held by customers “never belonged to FTX or Alameda” and shouldn’t be used to repay the platform’s many creditors. Fleece clients are searching for class motion status on behalf of over 1 million FTX clients worldwide.
Disgraced FTX founder Sam Bankman-Fried faces as much as 115 years in prison on eight federal counts. The feds say Bankman-Fried defrauded customers of billions of funds that were embezzled for use by FTX executives and to cover losses at sister cryptocurrency trading company Alameda Research.
Bankman-Fried is currently under house arrest at his parents’ home after posting a record $250 million bail.
![FTX](https://nypost.com/wp-content/uploads/sites/2/2022/12/ftx-221118-83.jpg?w=1024)
The submission is one of several efforts being made to get well from the FTX implosion. FTX CEO John Ray has signaled that the company will try and get well the Bankman-Fried investments and contributions that used the company’s funds.
FTX’s recent leadership team accused Bankman-Fried and his allies of lavish spending, including amassing an empire of luxury properties in the Bahamas and significant political donations ahead of the 2022 midterm elections.
A separate court filing on Tuesday revealed that Bankman-Fried and FTX co-founder Gary Wang borrowed $546 million from Alameda Research to purchase an 8% stake in equity retailing platform Robinhood. This share can also be covered by pending bankruptcy proceedings.
![Sam Bankman-Fried](https://nypost.com/wp-content/uploads/sites/2/2022/12/sam-bankman-fried-221228-37.jpg?w=768)
Wang and former Alameda Research CEO Caroline Ellison, a former lover of Bankman-Fried, pleaded guilty to fraud charges last week. Each disgraced executives are working with the feds.
Prosecutors called the alleged actions of Bankman-Fried “one of the largest financial frauds in American history.”
The collapse of FTX has further destabilized the cryptocurrency sector, which is already reeling this yr under the influence of deteriorating economic conditions and months of sell-off. Solana, a cryptocurrency once backed by Bankman-Fried, fell greater than 12% on Wednesday and lost as much as 94% of its value this yr. reported Bloomberg.
With postal wires