In a recent press release, the now-defunct cryptocurrency exchange FTX announced that it has initiated legal action against non-fungible token (NFT) marketplace NFT Stars Limited and artificial intelligence (AI) gaming platform KUROSEMI INC, more commonly known as Delysium. The exchange revealed that the lawsuit’s purpose is to recover assets tied to token agreements, as these platforms have refused to engage in discussions regarding the return of assets.
FTX Extends Lawsuit to Unresponsive Entities
The platform’s Estate noted that it will act similarly to other token and coin issuers that own FTX assets but have been uncooperative in negotiations. It has also warned the platforms to respond promptly to avoid potential litigation.
“We urge token and coin issuers to return assets that rightfully belong to FTX, and are willing to initiate litigation barring adequate engagement. Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors, including by filing two complaints against issuers who have repeatedly ignored our attempts to engage.”
While the press release announced FTX’s decision to sue NFT Stars Limited and Delysium, it does not provide further specific details of the token agreements or mention the other coin and token issuers involved.
FTX Seeks to Repay Creditors
The platform’s recent actions are part of the bankrupt exchange’s broader efforts to recover funds and pay off its debts following its collapse. The platform had previously pursued lawsuits against companies that had failed to return assets.
Last November, the company took legal action against Singapore-based Crypto.com, seeking to recover $11.4 million in assets held in an Alameda Research account on the platform.
After the defunct exchange filed for bankruptcy in November 2022, Crypto.com froze the account and refused to release the funds. Crypto.com’s continued refusal to release the funds ultimately led to FTX filing a lawsuit against the platform to reclaim the assets tied to Alameda’s account.
Another company that also fell into this category was the popular crypto exchange Binance. Also in November, the platform filed a lawsuit against Binance and its former CEO, Changpeng Zhao (CZ), to recover $1.8 billion.
The platform alleged that Binance sold its stake in the defunct exchange back to co-founder Sam Bankman-Fried in 2021. However, FTX claimed the transaction was fraudulent because the company may have been insolvent then and didn’t have enough assets to cover its debts.
