The management of bankrupt cryptocurrency exchange FTX has initiated legal proceedings against former employees of a Hong Kong affiliate, Salmeda. FTX alleges that these individuals withdrew $157.3 million under fraudulent circumstances just hours before the exchange filed for bankruptcy.
The defendants in this lawsuit, Michael Burgess, Matthew Burgess, Lesley Burgess, Kevin Nguyen, and Darren Wong, along with two affiliated companies, are accused of conducting withdrawals during the “preference period” preceding FTX’s bankruptcy filing.
According to court documents, Michael Burgess, Matthew Burgess, Kevin Nguyen, and Darren Wong were former employees of FTX group because Salameda Ltd, the company they worked for, was effectively controlled by Sam Bankman-Fried, the former CEO of FTX.
The court documents revealed that even upon departure from Salmeda in January 2022, Michael Burgess, Nguyen, and Wong maintained business enterprises with registered accounts on FTX.com and FTX US, such as those listed as defendants: 3Twelve and BDK.
The lawsuit claimed that they exploited their influence within FTX to facilitate various transactions, including one involving Lesley Burgess, Michael Burgess’s mother, to withdraw funds despite being aware of the impending insolvency of the exchange. Slack messages were presented as proof of these interactions.
According to the court filing:
“Each of these transfers to Defendant Michael Burgess was made with the intent to hinder, delay or defraud FTX US’s present or future creditors.”
Notably, these transfers occurred just hours before FTX suspended all non-fiat user withdrawals on November 8, 2022.
This lawsuit is the latest in the aggressive push by the new management to recover funds that it deem lost or unjustifiably removed from the exchange’s coffers. It is the third lawsuit in September 2023 alone. Notably, the management filed a lawsuit against Sam Bankman-Fried’s parents earlier to recover substantial amounts of funds that could affect the Chapter 11 bankruptcy process for the embattled exchange.
FTX Sets September 29 Deadline For Creditor Claims
Meanwhile, the Management has announced that the deadline for creditors to file a proof of claim is September 29, 2023, at 4 PM ET. This deadline extension was communicated through a post on X on September 21, 2023.
The deadline to file a proof of claim is 09/29/2023 4PM ET (“Bar Date”). Please begin the claims process through the FTX Customer Claims Portal (https://t.co/DkYi2hDLbI) if you have not done so already.
— FTX (@FTX_Official) September 21, 2023
Creditors who have not yet done so are strongly encouraged to initiate the process by visiting the FTX Customer Claims Portal.
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