FTX, under the leadership of John J. Ray III, is suing its former employees and their companies for $157 million, alleging fraudulent withdrawals during the preferential period.

FTX has been involved in bankruptcy proceedings for over 10 months. Throughout that period, the bankruptcy team has been trying to claw back funds through legal action and urging the voluntary return of donations.

FTX Sues Former Hong Kong Employees

According to court filings, FTX has filed a lawsuit against the following individuals and entities:

• Michael Burgess
• Kevin Nguyen
• Darren Wong
• Matthew Burgess
• Jing Yu
• Lesley Burgess
• 3Twelve Ventures Ltd.
• BDK Consulting Ltd.

FTX claims that although Michael Burgess, Nguyen, and Wong were employees of Hong Kong-based Salameda, they worked in senior-level positions for the FTX Group. They used FTX Group’s funds for trading activities, averaging $100-$400 million in monthly notional trading volume from January to November 2022.

Click here to learn more about the FTX collapse

Also, FTX alleges that these parties took advantage of the preferential withdrawals, stealing the opportunities of a fair withdrawal for other FTX creditors. The filing reads:

“Based on currently-available information, during the Preference Period, the Defendants collectively received the benefit of withdrawals from their FTX.com and FTX US accounts of the digital assets and fiat currency set forth in the attached Exhibit A, which constitute preferential transfers and are avoidable under Section 547 of the Bankruptcy Code.

Based on pricing as of August 31, 2023, those assets are collectively valued at approximately $157.3 million.”

Previous Clawback Actions 

FTX is actively taking legal actions against individuals and firms to claw back funds to make the creditors whole

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Author: Harsh Notariya

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