FTX Investors File Class Action Lawsuit Against Sullivan & Cromwell
A group of FTX investors has initiated a proposed class action against US law firm Sullivan & Cromwell for their alleged involvement in the bankrupt crypto exchange’s fraudulent activities. The plaintiffs argue that the law firm provided FTX with resources, connections to regulators, expertise, and assistance that were vital to perpetuating the scheme. They also claim that Sullivan & Cromwell was aware of the fraud and even took steps to aid the company in its wrongdoing.
Details About The Lawsuit
The court filing by the plaintiffs states that FTX could not have carried out fraud on such a large scale without the help of Sullivan & Cromwell. The law firm formed a close relationship with FTX through its General Counsel, Ryne Miller, who had previously worked at Sullivan & Cromwell. The law firm provided legal services to FTX and its subsidiaries, including Alameda Research.
The plaintiffs allege that there is no way Sullivan & Cromwell was unaware of the fraudulent activities and suggest that the law firm actively assisted these companies in their misdealings. Additionally, they claim that Sullivan & Cromwell pushed for FTX to file for bankruptcy and received $4 million from the company for their services during the bankruptcy proceedings.
Criticism Against Proposed Sale Of FTX’s SOL Tokens
Sunil Kavuri, an FTX creditor, has raised concerns about the proposed sale of FTX’s discounted SOL tokens to Pantera Capital. According to Kavuri, these tokens should be distributed to the exchange’s creditors instead of being sold to a crypto-focused asset manager. Pantera Capital plans to purchase these SOL tokens at a discounted price of $59.95 each.
Kavuri and other creditors argue that this sale is unfair because FTX’s repayment plan stated that customers would be repaid based on crypto prices as of November 2022. They believe that the tokens belong to them and should not be sold at a discount, resulting in them receiving only a fraction of their value in dollars.
It is important to note that the article included a featured image, a chart from TradingView, and links to external sources such as Shutterstock and CryptoNews. These elements have been removed in the rewritten version.
Hot Take: Investors Seek Accountability for FTX’s Fraud
A proposed class action lawsuit has been filed against law firm Sullivan & Cromwell by FTX investors who believe that the firm played a significant role in the bankrupt crypto exchange’s fraudulent activities. The investors argue that Sullivan & Cromwell provided resources and assistance that were crucial for FTX to carry out its scheme. They also criticize the proposed sale of FTX’s SOL tokens, which they believe should be distributed to creditors instead of being sold at a discount.
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