FTX Sues Former Employees Of Hong Kong Affiliate For $157 Million

Updated: 22 September 2023

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Bankrupt crypto exchange FTX filed a lawsuit against former employees of Hong Kong-based affiliate Salameda to recover $157 million it alleges was syphoned from the company’s coffers in the three months before it collapsed.

FTX’s court filing, submitted on Sept. 21, alleges that Kevin Nguyen, Darren Wong, Michael and Matthew Burgess, and their mother, Lesley Burgess, fraudulently withdrew the funds via preferential transfers from accounts registered with the crypto exchange.

It said the defendants rushed to withdraw assets and use their connections inside FTX to ensure that their withdrawal requests would be prioritized, thus disadvantaging the exchange’s other customers. The withdrawals were made during the 90 days before November 11 last year, the day FTX filed for bankruptcy.

#FTX sues ex-employees of a Hong Kong affiliate, Salameda, to recover $157.3M.

Controlled by SBF, the entity fraudulently withdrew assets days before the bankruptcy.🤯

— Moby Media (@mobymedia) September 22, 2023

FTX Employee Withdrew $123 million Hours Before Withdrawals Halted

Just hours before FTX halted withdrawals on November 8, 2022, and three days before the bankruptcy filing, defendant Matthew Burgess allegedly enlisted several FTX employees to push pending withdrawals out of the way and clear the path for his transactions. The filing revealed messages sent via the communications app Slack as evidence of such requests.

It resulted in the withdrawal of more than $123 million via FTX US accounts that Burgess allegedly represented as his own, the filing says, adding that the transfers were made “with the intent to hinder, delay or defraud FTX US’s present or future creditors.”

The court filing alleges that Salameda was controlled by FTX founder Sam Bankman-Fried.

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