FTX Seeks to Recover $300M Paid to the Leadership of Its European Affiliate

FTX Seeks to Recover $300M Paid to the Leadership of Its European Affiliate

FTX bankruptcy lawyers have sought court orders to
recover $323 million paid to the leadership of FTX Europe, a subsidiary of the
now-bankrupt cryptocurrency exchange. The amount is believed to be part of a
larger sum of money allegedly misappropriated by the former FTX executives.

According to a court
filing yesterday (Wednesday) seen by CoinDesk, Sam Bankman-Fried, the former
FTX CEO and the FTX Group, allegedly paid the money for the acquisition of
DAAG, a Swiss company that was later renamed FTX Europe.

According to the
lawyers who submitted the matter on behalf of FTX and Maclaurin Investments, an entity owned by Alameda Research, FTX Europe had limited resources.

FTX Traces Customers’ Assets

FTX is now seeking that
a Delaware-based bankruptcy court handling its bankruptcy proceedings order that the
funds paid to the individuals overseeing FTX Europe, Patrick Gruhn, Branson
Willaims, Robin Matzke, and Lorem Ipsum, be returned to the company.

On top of that, FTX
bankruptcy lawyers
informed the court that the leadership of FTX Europe received approximately
$100 million for the acquisition of K-DNA, a licensed entity in the European
Economic Area, which was later integrated with FTX Europe for €2 million.

The FTX Group has also
asked the court to stop the remaining payments of more than $50 million to the
FTX Europe’s leadership. In the filing, the exchange’s lawyers claimed that FTX Europe
is not valuable and cannot be sold.

FTX Europe

In April, a court in
Switzerland granted FTX permission to explore the potential sale of FTX
Europe. The permission was granted following a petition filed by FTX
Europe to restructure its debt amid the bankruptcy filing by the parent
company, FTX.

Earlier in the year, FTX
Europe announced that
it had initiated processes to allow its users to withdraw funds. The subsidiary
had only been in operation for eight months before the collapse of its parent
company FTX.

FTX’s bankruptcy team
released a report in June that the cryptocurrency exchange had so far recovered
$7 billion out of the
$8.7 million owed to customers. In the report, the team noted that the
extensive commingling of funds complicated the efforts to recover the remaining
assets, Finance
Magnates reported.

The
former exchange’s executives reportedly misappropriated customers’ funds in
speculative trading, political donations, and investments in luxury real estate
in the Bahamas. Sam Bank-Man Fried is facing
several federal charges related
to fraud and conspiracy.

This article was written by Jared Kirui at www.financemagnates.com.

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