- FTX escalates legal action against NFT Stars and Delysium for allegedly withholding owed crypto assets.
- The exchange urges other token issuers to return assets, warning of more lawsuits to maximize creditor recoveries.
- This legal push coincides with FTX’s upcoming $16 billion cash distribution to creditors starting May 30th.
In a major step, FTX is ramping up legal pressure against uncooperative token issuers or counterparties who are stonewalling asset recovery efforts. As per the press release, the exchange named two firms, NFT Stars Ltd. and KUROSEMI INC. (d/b/a Delysium), who have allegedly gone silent over handing over contractually entitled tokens. In the filing, it accused the firms of avoiding calls for engaging and seeking a resolution without litigation.
We urge token and coin issuers to return assets that rightfully belong to the exchange, and are willing to initiate litigation barring adequate engagement. Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors, including by filing two complaints against issuers who have repeatedly ignored our attempts to engage.
The FTX Recovery Trust is represented by Sullivan & Cromwell LLP as legal counsel and is aided by Alvarez & Marsal North America, LLC as financial advisor, Perella Weinberg Partners LP as investment banker, Quinn Emanuel Urquhart & Sullivan, LLP as special counsel, and Landis Rath and Cobb LLP as Delaware counsel.
$16B Payout Looms as FTX Sues for Missing Crypto
As of now, FTX is in the process of contacting numerous other token and coin issuers regarding its assets and has warned of additional suits against non-responsive parties. It urges these parties to respond timely to avoid litigation.
This legal development comes as the crypto exchange is gearing up for a significant payout, with $16 billion in cash scheduled for distribution to creditors on the 30th of May. Notably, small creditors have already begun receiving payments, offering a glimmer of hope after the platform’s dramatic crash in November 2022.
While the exact amounts individual creditors will receive hinge on the finalized claims process, this large-scale disbursement marks a huge step forward in the complex FTX saga. The news will be closely watched by the crypto community and those impacted by the exchange’s failure.
Read more: FTX Unstakes 186K SOL Tokens—Will the Market See Another Shock?