Lawyers for the bankrupt crypto exchange FTX are attempting to get back over $323 million from the then-Swiss Company DAAG, which rebranded to FTX Europe after it was bought by former CEO Sam Bankman-Fried. Attorneys argued that the acquisition did not add much to the exchange’s operations beyond gaining access to European regulators through the ownership of a local entity.
According to the Delaware court filing dated July 13, the plaintiffs, FTX Trading Ltd., and Maclaurin Investments Ltd. [owned by hedge fund Alameda Research], requested the court order the return of funds sent to the current leadership of the European wing: Patrick Gruhn, Robin Matzke, Brandon Williams, and Lorem Ipsum UG.
“FTX Insiders pursued the DAAG acquisition because they believed DAAG’s founders could provide access to European regulators that would allow it to obtain the necessary licenses for activities in the European Economic Area, and because they wanted to benefit Williams and Matzke, who had preexisting relationships with Bankman-Fried,” the filing said.
The legal team also claimed that the leadership of the rebranded company received excessive earn-out payments totaling nearly $100 million in connection with the purchase of K-DNA, a company that was later incorporated into FTX Europe and had already been granted EEA operating authorization for only €2 million.
FTX: Path To Recovery
Consequently, they requested that the court halt the payment of any outstanding sum to the FTX Europe leadership. According to the petition, the agreement was for more than $376 million, of which $52.5 million is the remaining obligation.
As earlier reported, the defunct crypto exchange under the new leadership is aiming to claw back over $700 million from former CEO Bankman-Fried’s investment firms. In the June 22 filing, the exchange named investment firms K5 Global, Mount Olympus Capital, SGN Albany Capital, and their affiliated entities for aiding and abetting SBF.
FTX’s new CEO, John Ray III, has also initiated the process of reaching out to potential participants in the exchange’s revival. According to a report by the WSJ, the bankrupt trading firm is negotiating with investors about supporting a potential reboot through setups like a joint venture, citing people familiar with the conversations.
