In an effort to recover $445.8 million in debt payments paid by the bankrupt cryptocurrency exchange FTX before it filed for bankruptcy in November 2022, FTX filed a lawsuit against the cryptocurrency lender Voyager Digital on Monday. In the midst of a crash in the cryptocurrency markets in 2022, FTX and Voyager simultaneously filed for bankruptcy; however, Voyager's filing came four months earlier.
Voyager requested recovery of all loans owed to FTX and its affiliated hedge fund Alameda Research after filing in July.
In a court document, FTX claimed that it had paid Voyager $248.8 million in September and $193.9 million in October on Alameda's account. In addition, FTX paid $3.2 million in interest in August, per its legal papers. FTX's complaint states that since these loan payments were paid so soon after FTX filed for bankruptcy, they can be recouped and might be applied to pay off other FTX debtors. When FTX, previously one of the leading cryptocurrency exchanges in the world, declared bankruptcy in November, it sent shockwaves through the industry and left an approximately nine million consumers and other shareholders risking damages in the billions of dollars.
A number of its top officials, notably Caroline Ellison, the chief executive of Alameda Research, have admitted to fraud, and the company's founder Sam Bankman-Fried has indeed been charged with fraud. Innocence has been disputed by Bankman-Fried, whose trial is set for October.
In the beginning, FTX seemed to survive the crisis that destroyed Voyager and other crypto companies in the summer of 2022, portraying itself as a “white knight” that might calm the roiling crypto markets. In a bankruptcy bidding, FTX offered to purchase the Voyager platform; however, when FTX collapsed in November, the planned purchase was abandoned.
FTX admitted the claims that Alameda had allegedly stolen FTX customers' funds to pay for its reckless lending and borrowing in its suit filed on Monday. Voyager and other cryptocurrency lenders, meanwhile, were accused of being complicit in Alameda's actions by “knowingly or carelessly” directing their clients' cash onto Alameda, according to the report.
“Voyager's business model was that of a feeder fund,” FTX mentioned. “It solicited retail investors and invested their money with little or no due diligence in cryptocurrency investment funds like Alameda and Three Arrows Capital.”
The founders of Three Arrows Capital, which also declared bankruptcy in 2022, have declined to collaborate with the court-appointed trustees who are attempting to recoup resources for Three Arrows clients.
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