FTX lawyers ask the U.S. bankruptcy court in Delaware to deny FTX Digital Markets (DM) claims to the property of FTX Trading Limited.
They argue that FTX DM was a fraud haven to which former FTX CEO Sam Bankman-Fried transferred customer funds.
FTX Digital Markets Should Not Affect Creditor Claims
Lawyers say that FTX DM, which was placed into liquidation by Bahamian regulators on November 10, 2022, shortly before FTX Trading filed for bankruptcy, had falsely claimed that it owned cryptocurrencies, intellectual property, and customers of FTX.
Contrary to liquidators, the lawyers said, “FTX DM was no more than a short-lived provider of limited “match-making” services for customer-to-customer transactions.” The liquidators had stated previously that FTX was “the center of the FTX Group.”
These claims followed attempts by the liquidators to move the FTX bankruptcy case from the United States to the Bahamas.
Furthermore, FTX lawyers said that FTX DM was a non-debtor that should not threaten creditor claims to the property of FTX Trading.
They also say that Bankman-Fried had exploited a close relationship with Bahamian regulators to move $143 million of FTX customer funds from FTX.com and Alameda Research to FTX DM to enrich FTX employees.
Furthermore, the attorneys want the bankruptcy judge to declare transfers to FTX DM fraudulent. They also seek judgments that FTX DM has no ownershi
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Author: David Thomas
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