FTX Investors File Lawsuit Against Sullivan and Cromwell Over Crypto Fraud
A class action lawsuit has been filed by investors of FTX against law firm Sullivan and Cromwell for their involvement in an $8 billion fraud. The lawsuit alleges that Sullivan and Cromwell should face a jury trial on five different counts, including aiding and abetting crypto fraud. The investors claim that the law firm provided services to FTX that went beyond what a law firm should provide, and that they were eager to craft misleading strategies to further FTX’s misconduct.
The investors are being represented by the Moskowitz Law Firm, which has already filed a separate class action lawsuit against another law firm, Fenwick and West, for their part in the scam. The lawsuit states that while FTX customers lost everything, Sullivan and Cromwell was able to gain millions from the fraud.
“No Guarantee” for Victims of FTX Crypto Fraud
Before the lawsuit, Sullivan and Cromwell’s attorney promised the crypto exchange’s debtors that they would be repaid in full. However, investors expressed skepticism about these claims. The lawsuit highlights that the FTX Group filed for emergency Chapter 11 bankruptcy, causing over $30 billion in value to disappear almost overnight. It also notes that there is no guarantee that any of the victims will be able to recover their losses through the bankruptcy proceedings.
Bankman-Fried’s Conflict With Sullivan and Cromwell
FTX founder Sam Bankman-Fried has had his own conflicts with Sullivan and Cromwell’s lawyers. Reports allege that one of the lawyers was behind Bankman-Fried’s removal from the company. Bankman-Fried is currently awaiting sentencing for seven fraud charges, scheduled for March 28, 2024.
This article is for informational purposes only and does not constitute financial advice. You should consult with a professional financial advisor before making any investment decisions.
Hot Take: FTX Investors Seek Justice Against Sullivan and Cromwell
The lawsuit filed by FTX investors against law firm Sullivan and Cromwell highlights the alleged involvement of the firm in the $8 billion crypto fraud. The investors claim that the law firm went beyond its role and provided services that furthered FTX’s misconduct. While Sullivan and Cromwell promised full repayment to FTX’s debtors, the lawsuit expresses doubt about this guarantee. The bankruptcy proceedings of FTX are expected to continue for years, leaving victims uncertain about recovering their losses. Meanwhile, FTX founder Sam Bankman-Fried continues to face legal issues and conflicts with Sullivan and Cromwell’s lawyers, adding another layer to this complex case.
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