Current executives who run cryptocurrency exchange FTX and its subsidiary Alameda Research have reportedly filed lawsuits against Sam Bankman-Fried, former CEO of FTX, Nishad Singh, FTX's former engineering director, and Zixiao "Gary" Wang.
Wang is recognized as the founding partner of the company.
FTX Bought a Worthless Company by Paying Hefty Fees Before Bankruptcy
Representatives of FTX Limited and its subsidiaries Alameda Research and West Realm Shires (WRS) are suing three former FTX executives over a deal the company now believes is "worthless".
Prior to FTX's filing for bankruptcy protection, Bankman-Fried, Singh, and Wang allegedly bought a stock clearing firm called Embed and a FINRA-licensed stockbroker. The deal was made so that FTX could launch a service called FTX Stocks, but the product never went live.
Lawyers for Bitcoin exchange FTX say that these three names used the $248,010,467 FTX Group shares they embezzled to secure the settlement. The settlement was finalized "just a few weeks" before the Chapter 11 bankruptcy filing date of November 11, 2022.
The lawyers made the following statements in the statement:
“Besides Bankman-Fried, Singh, and Wang, they committed massive fraud, taking advantage of the FTX Group's lack of control and record keeping.
They have generously spent the FTX Group's assets on, among other things, private homes and jets, political and 'philanthropic' donations, and various investments. The acquisition of Embed was one of those transactions.”
Allegedly, the entire financing for the acquisition of Embed came from Alameda. Under the guidance of lawyers, FTX executives Bankman-Fried, Singh, and Wang, they covertly and illegally redirected and re-directed assets belonging to FTX.com, the primary global cryptocurrency exchange managed by Alameda's FTX Group, to fund the personal efforts of FTX executives. They insist on positioning it.
*Not investment advice.