FTX’s Legal Offensive to Recover Funds
The new FTX management has initiated a series of legal actions aimed at reclaiming funds disbursed before the filing of Chapter 11 in November 2022. Nobody is spared in this legal push, including Bankman-Fried parents, who allegedly “siphoned” millions.
The new leadership of FTX recently revealed they will try to reclaim funds paid out to celebrities such as tennis star Naomi Osaka and former basketball player Shaquille O’Neal, who were paid to endorse the platform.
Donations made by FTX are also targeted by the management, which hopes to recover funds gifted to charitable organizations and politicians. Another company facing legal action is venture capital firm K5, in which Bankman-Fried had invested approximately $700 million.
Desire to Revamp the Crypto Exchange
After FTX declared Chapter 11 bankruptcy on November 11, 2022, John J. Ray was appointed as the company's CEO. Ray is not new to managing bankrupt companies and leading attempts to recover funds, such as his stewardship of the Enron bankruptcy in 2004.
Following Ray’s appointment, the new CEO declared before Congress that he had not encountered such a failure of corporate control as the one encouraged at FTX. Aside from efforts to retrieve lost funds, Ray is attempting to find a buyer to relaunch the crypto exchange.
Experts expect the bankruptcy proceedings to be very complex, considering the entangled nature of Bankman-Fried’s crypto empire. The former CEO of FTX, Sam Bankman-Fried, was found guilty of all counts by a jury in a New York federal court in November, with sentencing scheduled for March 28, 2024.