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19/06/24
158
FTX Victims Ask Court to Surrender Firm’s Assets
Five days ago, a filing in the U.S. District Court for the Southern District of New York showed that attorneys representing FTX debtors and FTX Digital Markets are asserting their superior interest in specific property subject to the Court’s Preliminary Order of Forfeiture dated March 28, 2024, in the case between the U.S. government and the former CEO of FTX Sam Bankman-Fried (SBF).
The preliminary forfeiture order and a money judgment entered against SBF in the amount of $11.02bn provides that all specific property forfeited to the U.S. shall be applied towards satisfaction of the money judgment.
The specific property seized by the U.S. and subject to the preliminary forfeiture order includes property formerly held in the name of Emergent Fidelity Technologies, proceeds from the interlocutory sale of shares of the stock of Robinhood Markets Inc., funds formerly held in accounts at Farmington State Bank and at Silvergate Bank; Monies, assets, and funds formerly held in Binance.com and Binance.us accounts, aircrafts and more.
However, the attorneys argue that either the Debtors or FTX Digital or both have a superior interest in the Specific Property to those properties and cannot be forfeited to the U.S.
“Amending the Preliminary Forfeiture Order to provide for the return the Specific Property to the Debtors and/or FTX Digital will benefit all the creditors and stakeholders in the Debtors’ Chapter 11 bankruptcy proceedings and FTX Digital’s liquidation in The Bahamas, including victims of Bankman-Fried’s crimes,” reads the June 14 filing.
Furthermore, another filing from a group of claimants “whose digital assets were stolen by SBF” asked the court to surrender the forfeited assets to FTX users instead of the debtors. “The Bankruptcy Estate is laden with conflicts that may risk compromising the just distribution of the Forfeited FTX Customer Assets to FTX customers, as well as possibly the integrity of that distribution process,” reads the separate filing.
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