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FTX Targets Founder and Executives in $1B Lawsuit: Questionable Deals and Island Buying Plot

Press Releases Crypto News CryptoBriefing FTX Targets Founder and Executives in $1B Lawsuit: Questionable Deals and Island Buying Plot

“Fraudulent transfers worth over a billion dollars were made for the benefit of Defendants during the period February 2020 to November 2022.”

Targeted in the suit are key figures in the FTX conglomerate: Bankman-Fried, former chief technology officer Gary Wang, ex-director of engineering Nishad Singh, and Caroline Ellison, former CEO of Alameda Research. The defendants allegedly created fraudulent transfers for personal gain at the expense of FTXs’ cusomers:

“There were no existing limitations on Alameda’s ability to spend FTX exchange customers’ cash for its own purposes.”

Ellison, Wang, and Singh have confessed to fraud and are assisting federal prosecutors, Bankman-Fried denies all charges and awaits trial in October.

Allegations in the suit include inappropriate bonuses and unjust enrichment. Ellison allegedly transferred $22.5 million to Alameda’s payroll, then to a third entity owned by FTX, Salameda Limited, “before finally being sent to Ellison’s own personal account on the FTX exchange.”

Meanwhile, Bankman-Fried faces accusations of backdating a “Payment Agent Agreement” in a suspected attempt to bolster FTX’s initial public offering prospects, but it was a sham and the loan was issued to Alameda Research.

However, “the same FTX attorney [one year later] prepared another version of the sham agreement that did not reflect any loan to Alameda, which stated that Alameda provided mere ‘payment services’ pursuant to which it would ‘complete payments . . . as directed by FTX from time to time.’”

Alleged to misguide an external auditor and to prepare the company for a possible initial public offering, the agreement was part of a scheme where Alameda would not transfer any customer deposits to FTX, contrary to what was promised.

Ellison reportedly admitted the unique privileges that allowed Alameda unlimited acce

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Author: Emily Tonelli

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