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In an interesting development, the FTX Debtors’ Estate is currently battling claims from certain parties over the ownership of assets forfeited by Sam Bankman-Fried (SBF) following the criminal conviction of the former FTX CEO for fraud and money laundering. In a petition submitted on Friday, the debtors’ estate has now approached the US District Court Southern District of New York to establish ancillary proceedings and address these claims.
FTX: Three-Way Battle Emerges For SBF’s Forfeited Assets
The FTX Debtors Estate has filed for rights to claim all seized assets of Sam Bankman-Fried divided into six main categories i.e proceeds from the interlocutory sales of Robinhood shares placed in the name of Emergent Fidelity Technologies (another firm owned by SBF), funds in FTX Digital Markets’ accounts at Farmington State Bank and Silvergate Bank, funds in Binance accounts under Alameda Research Ltd. and Evergreen North Enterprises, two aircraft, funds in a Signature Bank account belonging to Bankman-Fried and former FTX Exec. Luk Wai Chan, as well as Political contributions by Bankman Fried, and other former FTX employees traceable to fraud and money laundering.
According to their submitted petition, the FTX Debtors Estate claims a superior right, higher than Sam Bankman-Fried, to these specific assets as they were all held in the company’s name or funded by the company’s assets.
However, the management of Emergent has filed for rights to claim proceeds from the Robinhood market shares. Based on their petition, while Bankman-Fried may be a majority owner of Emergent, the stock in question was purchased in the name of the company and not the defendant.
Meanwhile, a class action suit by a group of FTX creditors is also laying claims to all forfeited assets stating they are or were procured by FTX customer assets and should be returned to these customers rather than the FTX debtors’ estate.
Furthermore, this group of creditors aims to offer an in-kind settlement, returning assets to creditors on a 1:1 basis rather than in a dollarized form as proposed by the bankruptcy estate. In addition, the class action lawsuit also criticized the commitment of the debtors’ estate to pay non-customer creditors e.g. BlockFi with “FTX customer assets” ahead of regular customers’ creditors.
Following the review of these petitions, the court will grant each party a hearing date to adjudicate their respective claims over the forfeited assets Thereafter, the relevant authorities will be notified to ensure fair distribution of these assets.
Crypto Market Overview
In other news, the total crypto market cap has fallen by 3.2% in the last week falling to a value of $2.3 trillion.
Featured image from Forkast, chart from Tradingview
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