FTX Trading Ltd sued the SBF founder and other former executives on Thursday to recover $1 billion.
The defendants include Caroline Ellison, Sam Bankman-Fried (SBF), Gary Wang, and Nishad Singh.
The defendants embezzled money to buy luxury apartments, political donations, and speculative investments and carried out one of the largest financial frauds in history.
According to Reuters, FTX Trading Ltd sued the SBF founder and other former executives on Thursday, seeking to recover more than $1 billion they allegedly embezzled before FTXs bankruptcy.
Defendants in the lawsuit filed in Delaware bankruptcy court include former CEO of hedge fund Alameda Research Caroline Ellison, former FTX chief technical officer Gary Wang, and former FTX chief technical officer Nishad Singh. These are all key names and were an effective arm of SBF before the second-largest cryptocurrency empire collapsed.
This exchange said the defendants continued to embezzle funds to purchase luxury apartments, political donations, and speculative investments and conduct “one of the largest financial frauds in history.”,
FTX said the fraudulent transfers occurred between February 2020 and November 2022, when it filed for Chapter 11 bankruptcy protection.
These transfers may be reversed or “avoided” under US bankruptcy or Delaware law. US prosecutors say SBF was the mastermind behind a scam that led to the downfall of FTX, which included the embezzlement of billions of dollars in customer funds.
According to Thursdays complaint, the fraudulent transactions included more than $725 million in equity that FTX and West Realm Shires, an entity controlled by Bankman-Fried, awarded “without receiving any value in exchange.”
The suit also states that Bankman-Fried and Wang also embezzled $546 million to buy shares of Robinhood Markets (HOOD.O), while Ellison used $28.8 million to pay his bonuses. In addition, some of Bankman-Frieds criminal defenses are being funded by a $10 million “gift” he gave his father.
Previously, three close associates of Sam Bankman-Fried, Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder, and former CEO of FTX, along with FTXs chief technical officer Nishad Singh pleaded guilty to fraud.
However, the SBF, who is believed to be primarily responsible for 12 criminal counts, has so far pleaded not guilty to several criminal charges brought by US prosecutors. He is still out on $250 million bail, the most oversized bail ever for an individual.