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Highlights
- FTX has announced fresh legal action against token issuers holding its assets.
- The firm is urging token issuers to corporate to avoid lawsuits.
- FTX is scrambling to return funds to its creditors following its collapse.
FTX has taken legal action against two token issuers in a valiant attempt to recover its assets. The embattled exchange says it will begin lawsuits against entities in possession of its assets that refuse to cooperate in a last-ditch attempt to fulfill bankruptcy obligations.
FTX Rolls Out Full Legal Armada Against Token Issuers
According to a press release, FTX says it has opened lawsuits against token issuers with its assets that have avoided negotiations. Per the release, FTX’s latest legal case targets NFT Stars Limited and KUROSEMI for failing to engage with FTX to resolve the issue.
FTX says the decision to head to the courts is a last-ditch effort to bring unresponsive token issuers to the negotiation table. The exchange claims that the duo of NFT Stars Limited and KUROSEMI owes the bankrupt exchange contractually entitled tokens.
Per the statement, the exchange notes that previous attempts to seek an amicable resolution with the duo have gone unanswered.
“Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors including by filing two complaints against issuers who have repeatedly ignored our attempts to engage,” said FTX.
FTX is racing to recover its assets to fulfill its obligations to creditors after its implosion in 2022. After its bankruptcy filing, the exchange uncovered a trail of misappropriation with a sizable amount of its assets helped by third-party token issuers.
To fulfill its obligations, FTX unlocked $21M SOL as part of its creditor repayment plans, but the troubled exchange faces an uphill climb.
The company is set to distribute up to $16 billion in cash to its creditors at the end of May from its asset recovery attempts. FTX has previously settled with VC firm K5 Global to improve the scale of recoveries for stakeholders, ending a prolonged legal battle between both entities.
Beleaguered Exchange Issues Warning To Issuers
In the press release, FTX notes that it will not be resting on its laurels after commencing legal action against KUROSEMI and NFT Stars Limited. The firm says it will double its efforts to recover its assets, urging entities to respond to correspondence on the matter.
“We urge token and coin issuers to return assets that rightfully belong to FTX, and are willing to initiate litigation barring adequate engagement,” read the press release.
FTX is receiving legal representation from Sullivan & Cromwell, while Alvarez & Marsal North America is serving as financial advisor. In other news, sport apparel brand Nike is the subject of a $5M lawsuit alleging a rugpull, following its closure of NFT marketplace RTFKT.
Despite the heightened activity, the FTX token continues its steep descent, losing nearly 3% over the last day. Bitcoin price climbing above $95K failed to trigger a similar rally for FTT as bankruptcy proceedings reach a fervent pitch.
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