In a high-stakes legal battle, bankrupt cryptocurrency exchange FTX has filed a lawsuit against four former employees of its Hong Kong-based affiliate, Salameda. The lawsuit alleges that these individuals exploited their personal connections to withdraw their assets from FTX before the exchange filed for bankruptcy. FTX, along with two affiliated companies, claims that the defendants collectively benefited from withdrawing digital assets and fiat currency from their FTX.com and FTX US accounts.
This lawsuit comes after FTX’s former CEO, Sam Bankman-Fried, was denied early release from custody. The defendants named in the lawsuit include Michael Burgess, Matthew Burgess, Lesley Burgess, Kevin Nguyen, and Darren Wong, along with two affiliated companies. The lawsuit alleges that these entities engaged in fraudulent asset withdrawals in the days leading up to FTX’s bankruptcy filing.
During the 90-day period before the bankruptcy filing, the defendants allegedly raced to withdraw assets and used their connections within FTX to secure priority status over other customers. The withdrawals involved both digital assets and fiat currency, with an estimated collective value of up to $157.3 million as of August 31, 2023.
The lawsuit reveals the alleged scheme, stating that Matthew Burgess, an employee of the FTX Group, recruited fellow employees to expedite withdrawal requests from one of Michael Burgess’s FTX US exchange accounts. The account was misrepresented as belonging to Matthew Burgess himself.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Asia |
| Countries | ðŸ‡ðŸ‡° 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Lesley Burgess, Darren Wong, Matthew Burgess, Michael Burgess, Kevin Nguyen |
| Companies | FTX, Salameda |
| Currencies | None |
| Securities | None |
