Summary
- The FTX Recovery Trust said it has filed a $1.15 billion lawsuit against Genesis Digital Assets and its co-founders.
- It said the lawsuit is based on allegations that former FTX CEO Sam Bankman-Fried mixed customer funds to buy the stake at an 'outrageously high price.'
- The FTX restructuring team is recovering customer assets and said the lawsuit could affect investors' chances of recovering their assets.
The FTX Recovery Trust has filed a $1.15 billion lawsuit against Bitcoin miner Genesis Digital Assets and its co-founders.
On the 24th (local time), Decrypt reported that the lawsuit is based on allegations that former FTX CEO Sam Bankman-Fried mixed customer funds to purchase a stake in Genesis Digital Assets at an "outrageously high price." The investment was made through FTX's sister firm Alameda Research, and at the time Bankman-Fried owned 90%.
FTX collapsed in November 2022 amid allegations of mismanagement and embezzlement, and a restructuring team led by attorney John J. Ray III is currently recovering customer assets. Bankman-Fried was convicted in November 2023 on charges that he used customer funds for Alameda Research's high-risk investments and is serving a 25-year prison sentence in a Southern California prison.
Genesis Digital Assets declined to comment on the lawsuit and is currently headquartered in Dubai, United Arab Emirates, operating data centers in the U.S. and Europe.
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