In the aftermath of the collapse of the FTX exchange and the arrest of its former CEO, Sam Bankman-Fried, a fierce battle has emerged over the billions in forfeited assets. Various parties, including FTX debtors, the company’s Bahamian entity, and victims of the exchange’s demise, are all vying for a piece of the pie.
Lawyers representing FTX debtors and FTX Digital Markets filed a petition on June 14 in the U.S. District Court for the Southern District of New York, claiming a “superior right” to the forfeited assets to satisfy the court’s $11 billion judgment against SBF. They argue that assets such as FTX’s planes, bank funds, Robinhood stock, and political contributions from former executives should be used to compensate the over 1 million victims of Bankman-Fried’s crimes.
Emergent Fidelity Technologies, a firm that held over 55 million Robinhood shares on behalf of Sam Bankman-Fried and FTX co-founder Gary Wang, has also filed a petition to assert its claim on the assets. Meanwhile, a group of FTX users, represented by lawyers Adam Moskowitz and David Boies, are pushing for a direct allocation of the forfeited assets to them, expressing concerns about a potentially unfair distribution.
Sunil Kavuri, a plaintiff in the legal battle over FTX’s forfeited assets, has allied with other claimants in advocating for a fair distribution among FTX users rather than solely benefiting the debtors. Despite these petitions, Judge Lewis Kaplan has yet to make a decision on the matter.
As Bankman-Fried serves his prison sentence and appeals his case, other former FTX and Alameda executives have pleaded guilty and are awaiting sentencing. The saga continues as the fate of the forfeited assets remains in limbo, with conflicting interests and concerns still unresolved.