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FTX customers filed a class-action lawsuit against the failed crypto exchange to get their lost money back

FTX Sam Bankman-Fried graphicFTX customers filed a class-action lawsuit against the bankrupt crypto exchange and its former executives.

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  • FTX customers filed a class-action lawsuit against the firm to claim back their money on Tuesday. 
  • The complaint said customers deserve “priority rights” to repayment over other creditors. 
  • The lawsuit names former top executives including Sam Bankman-Fried and Caroline Ellison.

FTX customers filed a class-action lawsuit on Tuesday against the bankrupt crypto lending firm and former CEO Sam Bankman-Fried, to claim back money lost when the firm collapsed earlier in the year.

Four plaintiffs filed the class-action on behalf of millions of former FTX customers saying that the firm’s digital assets belong to customers and that they deserve priority access to those funds, according to the lawsuit filed in the US Bankruptcy Court in Delaware.

“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,” the complaint said. 

“Cash and assets traceable to customers, which never belonged to FTX or Alameda, and do not belong to the estates, should be earmarked solely for customers, and victimized customers should likewise have priority to any other cash possessed or recovered by Debtors.”

Lawyers for the plaintiffs did not immediately respond to Insider’s request for comment outside of normal working hours.  

FTX and 130 other affiliated companies filed for Chapter 11 bankruptcy and froze customer withdrawals in November, after it was exposed that Bankman-Fried transferred billions of dollars of customer funds to support Alameda. 

Bankman-Fried and his inner circle reportedly spent lavishly on homes and other purchases, using those funds. 

The class-action wants a declaration that FTX assets traceable to customers are not the company’s property, and that Alameda assets traceable to customers should not be considered Alameda property. 

If the court finds that it the assets remain FTX’s property, then customers should have “priority rights to repayment and/or recovery,” over other creditors, the complaint said. 

The lawsuit also named top FTX and Alameda Research executives including Zixiao Wang, Nishad Singh, and Caroline Ellison as defendants. 

Ellison, the former CEO of Alameda, pleaded guilty to seven charges on December 22, including conspiracy to commit wire fraud, securities fraud, commodities fraud, and money laundering. 

Bankman-Fried was hit with eight criminal charges including fraud and money laundering in December after being arrested. He was released from custody on $250 million bail and is required to stay with his parents before his trial.

Read the original article on Business Insider