FTX Initiates Action Against Hong Kong Entity: Details

In a recent report, it was revealed that on September 21, FTX initiated a legal action against former staff members of Salameda, a firm based in Hong Kong.

FTX Pursuing Recovery of $157M

According to the filed court documents, FTX is pursuing the recovery of $157.3 million, alleging that this sum was fraudulently withdrawn in the hours immediately preceding the FTX halted all non-fiat user withdrawals on Nov. 8, 2022.

Based on the filed documents, it is claimed that Michael Burgess, Matthew Burgess, their mother Lesley Burgess, as well as Kevin Nguyen and Darren Wong, in conjunction with two additional corporate entities, were purportedly linked to companies that maintained registered accounts on both FTX.com and FTX US. 

Expedition of Specific Pending Withdrawal Requests

The lawsuit alleges that Mathew Burgess exerted pressure on the exchange’s employees to expedite specific pending withdrawal requests that originated from one of Michael Burgess’s FTX US exchange accounts. The evidence cited in support of these claims includes messages exchanged on the Slack communication platform.

The filling states: “Each of these transfers to Defendant Michael Burgess was made with the intent to hinder, delay or defraud FTX US’s present or future creditors.”

FTX Seeks to Recover Millions

According to a recent report by TheCoinRise, the financially troubled company has initiated legal action against LayerZero Labs with the aim of recovering $21 million in assets that are alleged to have been fraudulently transferred before the collapse of the firm.

Potential for a Fresh Start

Notably, in August, the exchange’s bankruptcy administrator disclosed a potential strategy for a fresh start, offering a possible opportunity for revival. The strategy involves establishing a “rebooted” offshore exchange that would enable individuals to hold equity securities, tokens, or other forms of interests in the reconstituted company.

John J. Ray III, the current CEO of the crypto firm, has also indicated that the company has initiated discussions with potential partners as part of the efforts to rejuvenate the exchange.