Alameda Research, a subsidiary of the collapsed crypto exchange FTX, has initiated legal action against KuCoin to reclaim over $50 million in assets. The lawsuit was filed yesterday (Monday) in the US Bankruptcy Court for the District of Delaware.
Alameda Seeks Frozen Funds
According to court documents, KuCoin froze these assets after FTX's collapse in November 2022. At the time, the assets were worth approximately $28 million, but market changes have since increased their value.
The assets are considered part of the FTX estate and, as such, are intended for creditor repayments. KuCoin has not yet issued a response regarding the lawsuit.
In the lawsuit, FTX claims: “KuCoin has without justification refused to turn over the assets in the Account to the Debtors, despite numerous requests.”
Alameda Research asserts that KuCoin's refusal to return the assets violates bankruptcy laws. They are requesting the return of the funds, along with additional compensation for the delays.
???? FTX lance une action en justice contre KuCoin pour récupérer 50 millions de dollars d'actifs pic.twitter.com/3zVzfYHhCf
— Le Crypto Daily ???? (@LeCryptoDaily) October 29, 2024
Judge Approves FTX Repayment
This lawsuit follows a recent settlement by FTX with Bybit, where FTX recovered $228 million in assets to support its repayment efforts.
Earlier in October, a US judge approved FTX’s plan to cease operations and begin creditor payments. This plan reportedly aims to repay 98% of creditors,promising up to 119% of the amounts initially claimed based on asset values during FTX’s collapse.
Earlier, Finance Magnates reported that Prager Metis, the accounting firm that audited FTX, will pay $745,000 in civil penalties to resolve misconduct allegations from the Securities and Exchange Commission (SEC) regarding its audits of the collapsed crypto exchange.
The firm will also pay $1.2 million related to a second investigation into independence rule violations during audits of over 200 companies from 2017 to 2020. The SEC noted negligence-based fraud in two audit reports for FTX and identified failures in compliance with auditing standards and its own procedures.
This article was written by Tareq Sikder at www.financemagnates.com.
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