• FTX debtors have filed a lawsuit against FTX Digital Markets, claiming that it was a „fraudulent enterprise“ used as a shell entity to hide ownership.
• The complaint alleges that FTX DM was an „economic nullity“ within the FTX Group, created to defraud customers.
• The filing seeks a ruling that would assert that FTX DM had an „ownership interest“ in the property at the center of bankruptcy proceedings.
Filed Lawsuit Against FTX Digital Markets
Turner Wright 20 hours ago legal teams representing Alameda Research, FTX US and FTX Trading have filed a complaint against the Bahamas-based FTX Digital Markets (FTX DM), claiming the company was a “fraudulent enterprise” used as a shell entity to obfuscate the question of the firm’s ownership. In a March 19 filing with the United States Bankruptcy Court for the District of Delaware, FTX debtors sayFTX DM and joint provisional liquidators (JPLs) had claimed it was the “constructive owner” of FTX.com’s fiat and crypto assets as well as other intellectual property.
Allegations Against Fraudulent Enterprise
The complaint alleges that these “baseless claims” byFTXDM “will harmFTX.com customers and all other creditors oftheFTXTDebtors” as it continues with bankruptcy proceedings in the United States.“The JPLs‘ claim to ownership ofFT X . com ‚ s property is based largely on constructive, equitable, and other non-documentary arguments that depend uponthefalse premise thatFT X DM wasthecenterofthe F TX Group,“ says filing. Additionally, former F TX CEO Sam Bankman – Fried’s criminal and civil charges in the U . S . were connected to Bahamian authorities aimed at minimizing his “criminal and civil exposure should massive fraud be discovered.“
Seeking Ruling on Ownership Interest
As part of court filing , debtors seek ruling would assertthatF TXDMhadan“ownershipinterest“ inthepropertyatthecenterofbankruptcycase . Inaddition , legal team cites aforementioned criminallandcivilchargesclaiming connectionsBahamianauthoritiesaimedatminimizingexposurediscoveringmassivefraud .
Implications for Customers
Should this claim be successful , it could possibly endanger customer investments held on platform , potentially affectingallcreditors involved case .