Bankrupt FTX targets Crypto.com in $11 million lawsuit amid recovery effort News ▸ US ▸ Crypto.com ▸ FTX ▸ Bankruptcy
Bankrupt FTX targets Crypto.com in $11 million lawsuit amid recovery effort
FTX revealed that Crypto.com had also filed claims of more than $18 million during this bankruptcy process.
2 min read
Updated: Nov. 8, 2024 at 12:49 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bankrupt FTX has filed a lawsuit to recover at least $11 million held in a Crypto.com account linked to its sister company, Alameda Research, according to a Nov. 8 filing.
FTX alleges that before filing for bankruptcy, Alameda held an account at Crypto.com registered under the name Ka Yu Tin, also known as Nicole Tin.
According to the firm, this practice was typical for Alameda, which often opened accounts under shell companies or employees’ names to mask its trading activities. However, FTX claims Alameda funded and controlled the account in question.
After Alameda declared bankruptcy, Crypto.com reportedly locked the account and denied FTX administrators’ requests to access the funds despite repeated attempts.
FTX further claims that Crypto.com’s refusal is based on a mismatch between the account holder’s names and those seeking to recover the funds. The defunct firm asserts that it has clarified the complexities of the case to Crypto.com and has provided court-approved documentation, yet Crypto.com reportedly remains unresponsive.
To strengthen its case, FTX submitted an affidavit from Caroline Ellison, former CEO of Alameda Research, who stated that the Crypto.com accounts were indeed under Alameda affiliates or associated individuals. Ellison affirmed that Alameda had always considered the assets within these accounts belonging to the firm.
FTX concluded:
“The assets in the Alameda Account, valued at approximately $11.4 million as of the Petition Date, are not of inconsequential value or benefit to the estate and must be returned to the Debtors.”
FTX holds Crypto.com’s assets
FTX administrators are now attempting to leverage claims from companies affiliated with Crypto.com’s parent entities, Foris MT and Iron Block. These companies have filed claims against the failed exchange for $18.4 million and $237,800, which were held in FTX.com accounts before the exchange’s collapse.
Considering this, FTX requests that Crypto.com’s claims be deferred until the exchange releases the Alameda assets in its possession. The bankrupt exchange is also seeking recovery of the assets, legal costs, and additional relief.
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Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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FTX
FTX is a defunct cryptocurrency exchange, currently in bankruptcy proceedings, that was founded by Sam Bankman-Fried and Zixiao “Gary” Wang in May 2019.
Alameda Research
Alameda Research was once a principal trading firm, operating as an arm of the failed crypto exchange, FTX.
Crypto.com
Crypto.com was founded in 2016 on a simple belief: it’s a basic human right for everyone to control their money, data and identity.
Caroline Ellison is the former lead trader and former CEO at Alameda Research.