The bankrupt crypto exchange, FTX, has filed a lawsuit against Singapore-based Crypto.com, seeking to recover $11.4 million in assets held in Alameda Research’s account created in the Crypto.com platform. While the dispute is already within the FTX bankruptcy case in the United States, it requires the court’s hearing to resolve the conflict between the parties.
Why Sue Crypto.com?
According to FTX claims, its trading arm, Alameda, had funded and controlled the account housing the fund. Following the exchange’s November 2022 bankruptcy filing, Crypto.com locked the account, withholding the said assets contained in it. Despite repeated requests, it refused to cooperate with FTX’s demands for asset return, prompting the lawsuit.
Surprisingly, FTX acknowledged that Crypto.com also maintained two accounts on its platform, holding $18.63 million. The lawsuit alleged the Singapore-based exchange violated bankruptcy laws by retaining estate property without authorization.
FTX wants the court to dismiss all of Crypto.com’s claims associated with funds that are custodied by the bankrupt exchange unless it first returns all Alameda assets. The exchange further claimed in the filing that successful recovery of the funds would significantly aid its bankruptcy proceedings.
Meanwhile, after being sued by FTX, the Singapore-based exchange initiated a lawsuit against the U.S. Securities and Exchange Commission (SEC), aligning with other “industry peers.” It claims the legal move aims to challenge unauthorized regulatory actions and safeguard the future of the crypto market.
FTX’s Collapse Triggers Several Lawsuits
Since the fall of FTX, different filings associated with the scandal have surfaced. The defunct exchange has recently initiated a lawsuit against imprisoned Ryan Salame, former co-CEO of its Bahamian subsidiary, seeking reimbursement of approximately $98.8 million in cash and crypto. The lawsuit alleged that Salame intentionally facilitated the misappropriation of customer assets by FTX executives.
Nikolas Gierczyk, a California-based FTX customer, has also filed lawsuit against Olympus Peak hedge fund, alleging breach of contract. He sold his $1.59 million FTX claim to Olympus Peak for $930,000, retaining rights to additional recoveries. With FTX’s bankruptcy plan approved, the firm may receive more, but allegedly refused to honor Gierczyk’s residual rights.
