Securities Investigation: FTX Crypto Exchange
FTX INVESTIGATION ALERT: Berger Montague Investigates Claims On Behalf of FTX Customers
PHILADELPHIA, PA November 11, 2022 – Berger Montague is investigating potential claims on behalf of customers of FTX Crypto Exchange. Specifically, Berger Montague is investigating potential claims arising from FTX’s decision to lend customer assets to an affiliated trading firm to fund risky investments.
According to a November 10, 2022, Wall Street Journal article titled “FTX Tapped Into Customer Accounts to Fund Risky Bets, Setting Up Its Downfall,” FTX advanced about $10 billion worth of customer assets to an affiliated trading firm, Alameda Research – a firm known for aggressive trading strategies funded by borrowed money – to “fund risky” bets.
The article reports that Sam Bankman-Fried, FTX’s Chief Executive Officer, “told an investor this week that Alameda owes FTX about $10 billion” and that “Mr. Bankman-Fried described [the decision] as a poor judgment call.”
On the morning of November 10, 2022, Mr. Bankman-Fried tweeted that roughly $5 billion worth of customer withdrawals were requested on Sunday, forcing FTX to pause withdrawals earlier this week.
In response to the crisis, FTX was forced to “scramble for an emergency investment.” On Tuesday, November 8, 2022, FTX agreed to sell the company to its rival, Binance. The following day, Binance walked away from the deal.
If you are a customer of FTX and want to learn more about our investigation, please contact Berger Montague: James Maro at [email protected] or (215) 875-3093, or Andrew Abramowitz at [email protected] or (215) 875-3015.
Whistleblowers: Anyone with non-public information regarding FTX is encouraged to confidentially assist Berger Montague’s investigation or take advantage of the SEC Whistleblower program. Under this program, whistleblowers who provide original information may receive rewards totaling up to thirty percent (30%) of recoveries obtained by the SEC. For more information, contact us.