Various factions have staked their claims on the assets in question in the legal battle against ex-FTX CEO Sam Bankman-Fried, who is currently incarcerated for 25 years. In a recent court filing in the Southern District of New York, attorneys representing FTX debtors and the company’s Bahamian entity, FTX Digital Markets, asserted their rights to the assets earmarked to settle the $11 billion judgment against Bankman-Fried. They argued that FTX’s assets, including aircraft, funds in various banks, shares of Robinhood stock, and political donations from former FTX executives, should not be used for Bankman-Fried’s judgment but should benefit victims of the defunct exchange instead.
The filing emphasized the importance of returning specific assets to the debtors and FTX Digital to aid the creditors and stakeholders in the bankruptcy proceedings and liquidation of FTX Digital in The Bahamas. The goal is to maximize funds for distribution to over 1 million victims of Bankman-Fried’s criminal activities while minimizing administrative costs.
Following this filing, additional petitions were lodged on June 14 by lawyers representing the company and joint liquidators of Emergent Fidelity Technologies, focusing on the Robinhood shares and $20 million held by Emergent. In a separate petition, a group of claimants, represented by crypto attorneys Adam Moskowitz and David Boies, advocated for forfeited assets in the criminal case to be surrendered to FTX users rather than debtors, citing conflicts in the bankruptcy estate that could jeopardize a fair distribution process.
As of now, Judge Lewis Kaplan has not made a decision regarding the petitions. Bankman-Fried’s sentencing and the involvement of other former FTX and Alameda executives in the company’s downfall have added complexity to the legal proceedings. Bankman-Fried’s appeal is pending, while his co-defendants await sentencing or have already been sentenced.
The saga surrounding FTX’s assets and the legal battles that have ensued underscore the complexities and challenges faced by those involved in the aftermath of the company’s collapse.