The defunct cryptocurrency exchange FTX filed a lawsuit on Sept. 21 against former employees of Hong Kong-incorporated company Salamde affiliated with the FTX group, according to court documents.
The court filing says FTX seeks to recover $157.3 million that it claims was fraudulently withdrawn in the timespan leading up to the exchange filing for bankruptcy.
According to the filing, Michael Burgess, Matthew Burgess, Lesley Burgess – the mother of Michael and Matthew, Kevin Nguyen and Darren Wong, along with two companies allegedly had ownership of companies with registered accounts and FTX.com and FTX US and were able to withdraw funds in the “preference period” prior to the actual bankruptcy filing.
The court filing reads:
“Each of these transfers to Defendant Michael Burgess was made with the intent to hinder, delay or defraud FTX US’s present or future creditors.”
It continues to point out that these transfers were completed hours prior to FTX halting all non-fiat user withdrawals on Nov. 8, 2022.
The allegations include that Mathew Burgess pressured FTX employees to “push out” particular pending withdrawal requisitions “from one of Michael Burgess’s FTX US exchange accounts, while misrepresenting the account to be his own.” It cited messages on the Slack application.
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This development comes as Sam Bankman-Fried (SBF), the former FTX CEO, sits in jail awaiting the first of his two-part trial, which is set to begin on Oct. 3, 2023. The second trail is anticipated for March 2024.
On Sept. 21 judges decided against granting SBF early release from jail. He argued he couldn’t adequately prepare for trial from jail and said it violated his First Amendment Rights under the United States constitution.
However, on the same day, Judge Lewis Kaplan granted a motion proposed by the Department of Justice (DOJ) that bars testimony of SBF’s key witnesses.
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