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Sam Bankman-Fried FTX

Sam Bankman-Fried Fraud: FTX Users Drop Bombshell Lawsuit On Bankruptcy Lawyers

Scott Matherson
by Scott Matherson
1 year ago
·
Posted in FTX
Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

A group of FTX investors have instituted a proposed class action against US law firm Sullivan & Cromwell for their role in the bankrupt crypto exchange’s fraud against its customers. The law firm is known to have worked for the crypto exchange during its rise to prominence, and now the plaintiffs argue that they are also culpable for the company’s wrongdoing. 

Details About The Proposed Class Action

According to the court filing, the plaintiffs assert that FTX could not have achieved fraud on such a “tremendous scale” with the help of Sullivan & Cromwell (S & C). They claim that the law firm provided the defunct crypto exchange with “immense resources, connections to regulators, expertise, and assistance,” vital to perpetuating the scheme. 

Related Reading: Shiba Inu Burn Rate Slows Down After Surge, Can SHIB Price Continue To Moon?

The court document highlighted how S & C formed a close relationship with FTX through the company’s General Counsel, Ryne Miller, who once worked at the law firm. Through him, S & C is said to have “solidified their involvement and interest in FTX’s growth and expansion.” The law firm was also revealed to have provided legal services to FTX’s subsidiaries, including Alameda Research. 

Further elaborating on S&C’s deep involvement with the exchange and its sister company, the plaintiffs suggested that there was no way that the law firm wasn’t aware of the fraud and even took steps to aid these companies in their misdealings. Meanwhile, the law firm didn’t stop there; they also sought to benefit from FTX’s collapse. 

Sullivan and Cromwell, alongside Miller, were accused of pushing “heavily” for FTX to file for bankruptcy. Miller also apparently ensured that $4 million was wired to the law firm to retain its services for the bankruptcy proceedings. Bitcoinist once reported how the law firm had billed almost $40 million for work done in the crypto exchange’s bankruptcy case. 

Criticism Against Proposed Sale Of FTX’s SOL Tokens

FTX creditor Sunil Kavuri recently highlighted the irregularity in the proposed sale of FTX’s discounted SOL tokens to Pantera Capital. Sunil stated that these tokens are meant to be distributed to the exchange’s creditors rather than sold to the crypto-focused asset manager. Pantera will reportedly buy these SOL tokens at a discounted price of $59.95 each. 

Related Reading: Crypto Analyst Says This Solana Meme Coin Is About To Go On A Parabolic Rally

That doesn’t sit well with Sunil and other creditors, mainly because it was previously revealed, as part of FTX’s repayment plan, that the bankrupt crypto exchange will repay customers based on the crypto prices as of November 2022. These customers argue that the tokens belong to them and it isn’t proper for them to be paid a fraction of it in the dollar equivalent. 

FTT Token price chart from Tradingview.com (FTX Sam Bankman-Fried fraud)

FTT Token price recovers to $2.4 | Source: FTTUSDT on Tradingview.com
Featured image from Financial Times, chart from Tradingview.com
Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.
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Scott Matherson

Scott Matherson

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Scott Matherson is a leading crypto writer at Bitcoinist, who possesses a sharp analytical mind and a deep understanding of the digital currency landscape. Scott has earned a reputation for delivering thought-provoking and well-researched articles that resonate with both newcomers and seasoned crypto enthusiasts. Outside of his writing, Scott is passionate about promoting crypto literacy and often works to educate the public on the potential of blockchain.

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