FTX’s clients filed a class-action lawsuit against the failed cryptocurrency exchange, Sam Bankman-Fried and other former top executives, seeking a statement that the company’s digital asset holdings belong to the clients.
Filed in US Bankruptcy Court in Delaware, the case is the latest legal action to recover the FTX’s assets since customer class members don’t want to stand in line along other creditors.
The lawsuit alleges that FTX User Agreement did not permit the platform to use clients funds for its own purposes. Any removal of customer funds from their accounts was an “impermissible co-mingling, misappropriation, misuse, or conversion of customer property,” according to the complaint, and therefore, customers deserved to be repaid first.