Various factions have laid claim to the assets in question in the legal case against ex-FTX CEO Sam Bankman-Fried, who is currently incarcerated for 25 years. In a recent court filing on June 14 in the Southern District of New York, attorneys representing FTX debtors and the company’s Bahamian entity, FTX Digital Markets, argued for their right to the assets to satisfy the court’s $11 billion judgment against Bankman-Fried. They proposed that FTX’s aircraft, funds in several banks, shares of Robinhood stock, and political contributions linked to former FTX executives should not go towards Bankman-Fried’s judgment but instead benefit victims of the collapsed exchange.
The filing claimed that returning the specific property to the debtors and/or FTX Digital would benefit all creditors and stakeholders in the bankruptcy proceedings and liquidation in The Bahamas, including victims of Bankman-Fried’s crimes. The goal is to distribute the value of the assets to over 1 million victims through existing claims administration processes to maximize funds available for distribution.
Following this petition, two more were filed on June 14 by lawyers representing the company and joint liquidators of Emergent Fidelity Technologies, focusing specifically on Robinhood shares and $20 million held by Emergent. Additionally, another group of claimants, represented by crypto lawyers Adam Moskowitz and David Boies, called for the forfeited assets to be surrendered to FTX users rather than the debtors. Sunil Kavuri, an FTX customer who testified against Bankman-Fried, is among the plaintiffs in this case.
Judge Lewis Kaplan has yet to make a decision regarding a potential hearing or judgment on these petitions. Bankman-Fried’s bankruptcy case in Delaware proposed a reorganization plan in May, but some creditors, including Kavuri, have objections due to potential losses from U.S. taxes.
Bankman-Fried, convicted of seven felony counts, is currently appealing his conviction while in custody at the Metropolitan Detention Center in Brooklyn. Other former FTX and Alameda executives involved in the firm’s downfall have either pleaded guilty or await sentencing. Ryan Salame, former co-CEO of FTX Digital Markets, was sentenced to 90 months in prison and is set to report in August.