The customer class members do not want to stand in a line with the creditors of a failed crypto platform. The customer class is desperate to get back the money from FTX as they claim this platform to be a failed crypto platform.
So, they have filed a lawsuit against FTX to get priority reparations from FTX since they think they need it. The lawsuit filed by the FTX customers is considered the latest legal effort to claim that there has been dwindling done with the assets of FTX.
While there are numerous government agencies that are in line to sue FTX and its founder Sam Bankman-Fried, there have been a group of customers who tried to get their money back first.
Four individuals initiated a class-action lawsuit that demands priority access to the frozen funds of the company, FTX for their customers, not the investors. On Dec 27, the lawsuit was filed in the United States Bankruptcy Court for the District of Delaware.
The four plaintiffs seem to be stating that they are representing the whole class of former FTX customers, which assemble together to form up to 1 million individuals.
The main objective of the lawsuit is to obtain the priority rights to return the digital assets that are held by FTX US of FTX.com to their customers.
The plaintiffs are emphasizing that the FTX User Agreement did not allow the platform to use the customer funds for their own purposes, which includes using or borrowing it to operate their expenses.
Any removal of the customer funds from the accounts was an “impermissible co-mingling, misappropriation, misuse, or conversion of customer property,”
According to the complaint. Consequently, any funds that are frozen by FTX and traceable as the customer’s property cannot be used to pay the non-customer expenses, creditors, or claims until the customers are repaid.
The lawsuit expresses:
“Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda.”
FTX did not respond when asked to comment on the lawsuit. Also, the Department of Justice has launched an investigation into the whereabouts of roughly $372 million in missing digital assets from FTX.
During the bankruptcy and internal collapse, it was announced on Nov 12, that FTX warned the customers of abnormal wallet activity regarding at least the 228,523 Ether that was transferred out of the exchange from an unknown predator.
Another foul play was suspected by the FTX when the crypto wallets that are associated with the now-bankrupt trading firm known as Alameda Research, also called the sister company of FTX company, had started to transfer out funds just a few days after the SBF was released a $250 million bond.
The customers think that this is a suspicious act done by FTX and its sister company Alameda Research.