FTX Creditors Demand SBF's Forfeited Property: Lawyers File Petition

FTX Creditors Seek to Seize SBF's Assets in Legal Petition

In a significant development for FTX creditors, class action lawyers Adam Moskowitz and David Boies have petitioned Judge Moore in Florida, seeking the seizure of any property tied to Sam Bankman-Fried (SBF), the disgraced founder of FTX. This move is part of their ongoing effort to recover assets believed to be in SBF’s possession, which could provide some financial relief to the creditors affected by the cryptocurrency exchange’s catastrophic collapse.

Creditors’ Claims and Legal Arguments

Sunil Kavuri, the FTX creditor representative, stated that the class action lawyers have specifically targeted SBF's forfeited property in their filing. The creditors argue that the MDL lawsuit does not include claims that belong to the bankruptcy estate, emphasizing that the assets in question rightfully belong to the customers, not FTX itself. They assert that the Terms of Service are clear and even FTX insiders have confirmed that these assets should be returned to the plaintiffs. The creditors maintain that their cryptocurrency holdings can be directly traced to SBF’s investments, reinforcing their entitlement to reclaim their property.

Opposition to FTX’s Reorganization Plan

The Moskowitz Law Firm and Boies Schiller Flexner LLP, representing thousands of plaintiffs in the multi-district litigation (MDL) against FTX, have objected to the proposed reorganization plan for FTX Trading Ltd. and its affiliates. They argue that the plan’s recovery figures are misleading and fail to account for the appreciation in cryptocurrency value since the Petition Date, thus not fulfilling Bankruptcy Code 1125’s full disclosure requirements.

Sunil Kavuri has also voiced opposition to the proposed compensation plan. He advocates for debts to be settled in cryptocurrency rather than their dollar equivalent at the point of bankruptcy, ensuring that creditors receive fair compensation reflective of current market values.

Conclusion

The legal battle for FTX creditors continues as their representatives seek to recover assets tied to Sam Bankman-Fried, while also challenging the proposed reorganization plan. The outcome of these efforts will significantly impact the financial recovery of those affected by FTX’s collapse.

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