On November 8, the FTX bankruptcy administrator filed more than 20 new lawsuits and intensified legal action against various entities.
These lawsuits reflect FTX's concentrated efforts to recover assets from numerous companies and individuals. Since November 2022, FTX debtors have initiated 51 adversarial actions, with 30 of them occurring in the past few weeks.
FTX Aims to Recover Over $1 Billion in Losses Through New Lawsuits
According to FTX's bankruptcy filings, most of the recently submitted documents address various allegations, including political donations, the failed exchange's charitable activities, investment and market fraud, and manipulation claims.
"FTX is tracking down dozens of left-wing organizations that received improper donations made with customer money," an FTX creditor revealed.
Thomas Braziel, the founder of 117Partners, noted that FTX may be able to recover some of the donations under U.S. bankruptcy law. He pointed out that funds can be recovered if they were donated with fraudulent intent or without corresponding value. Additionally, donations made when the donor was insolvent are particularly at risk of being clawed back.
"Not all donations are exempt. The bankruptcy administrator will closely examine the donors' intent, timing, and financial condition to determine if the charitable transfers can be recovered," Braziel said.
The failed exchange's legal team is pursuing not only non-profit organizations but also other prominent individuals and entities. The foundation has filed a lawsuit seeking over $100 million in damages against former White House communications director Anthony Scaramucci and his company. Another lawsuit targets the team behind the video game Storybook Brawl, which was invested in and promoted by FTX co-founder Sam Bankman-Fried.
FTX has also initiated a significant recovery lawsuit against Nwaez Mohamed Miroon, known as "Humpie the Whale," who is believed to have caused over $1 billion in losses through market manipulation. Earlier this year, Humpie led a governance attack on the DeFi protocol Compound Finance, inflicting significant losses on the platform.
"Miroon also repeatedly violated FTX's rules, leading Alameda to take on Miroon's risky positions and incur hundreds of millions in additional losses. In total, FTX and Alameda suffered around $1 billion in losses due to Miroon's criminal acts, and Miroon used the proceeds of his crimes to fund various other criminal activities," FTX alleged.
These legal actions reflect FTX's intensified efforts to recover assets from numerous individuals and companies. In the past week, the exchange has initiated legal actions against major centralized exchanges, such as Crypto.com and Kucoin, regarding funds associated with the platform.
