FTX Creditors Demand SBF’s Forfeited Property As Lawyers File Petition, Here’s All

The lawyers leading the class action lawsuit for FTX creditors, Adam Moskowitz and David Boies, have taken a major stride in their quest to secure justice for those devastated by the cryptocurrency exchange’s catastrophic collapse. 

They’ve submitted a formal request to Judge Moore in Florida, demanding the seizure of any property tied to Sam Bankman-Fried (SBF), the disgraced founder at the center of FTX’s implosion. This strategic move seeks to recover assets believed to be in SBF’s possession, which could potentially offer some financial relief to the countless creditors left reeling from the aftermath of FTX’s downfall. 

Creditors’ Claims and Legal Arguments

Sunil Kavuri, the FTX creditor representative, has publicly stated that his class action lawyers, Moskowitz and Boies, have filed the petition in Florida to target SBF’s forfeited property. The creditors argue that the MDL lawsuit does not encompass claims that would belong to the bankruptcy estate, emphasizing that the assets in question rightfully belong to the customers, not FTX itself.

According to Kavuri, 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.

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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, the FTX creditor representative, 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.

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