The now-defunct cryptocurrency exchange FTX has filed a lawsuit on September 21 against former employees of Salameda, a Hong Kong-registered company that was formerly associated with the FTX Group. In court documents, FTX alleges that these former employees fraudulently withdrew just $157.3 million hours before FTX declared bankruptcy.
The lawsuit targets individuals including Michael Burgess, Matthew Burgess, Lesley Burgess (their mother), Kevin Nguyen, and Darren Wong, along with two other companies. These entities purportedly held ownership in companies with accounts on FTX.com and FTX US and withdrew funds during the "priority period" just before FTX filed for bankruptcy. The court documents emphasize that these transfers were made with the intent to hinder, delay, or defraud FTX US's current or future creditors.
Additionally, the lawsuit points out that these transfers occurred shortly before FTX halted all non-fiat user withdrawals on November 8, 2022. Matthew Burgess is accused of pressing FTX employees to manipulate specific pending withdrawal requests from one of Michael Burgess's FTX US trading accounts while misrepresenting the account as his own.
This legal action follows former FTX CEO Sam Bankman-Fried's upcoming trial scheduled for October 3, 2023, and a subsequent trial in March 2024. SBF's request for early release from prison was denied on September 21, with the judge citing his inability to adequately prepare for trial and concerns about violations of his First Amendment rights. Furthermore, on the same day, Judge Lewis Kaplan granted a motion by the Justice Department to disallow a key witness for SBF from testing.
