INVESTOR ALERT: LKLSG Investigating Potential Lawsuit Relating to FTX Collapse

MIAMI, Nov. 21, 2022 /PRNewswire/ -- FTX, the digital cryptocurrency exchange founded by Sam Bankman-Fried, recently filed for bankruptcy and is the subject of federal probes by the Securities and Exchange Commission ("SEC") and the Department of Justice ("DOJ") for its possible mishandling of client funds. In an effort to help victims of the FTX collapse, the law firm of Levine Kellogg Lehman Schneider + Grossman LLP ("LKLSG") in Miami is investigating potential legal action against third parties who may have aided FTX's wrongs. 

Founded in 2019, FTX quickly attracted large institutional investors and became the fourth-largest cryptocurrency exchange by volume earlier this month.  FTX offered its clients a marketplace to buy, sell, and store cryptocurrencies, and even issued its own cryptocurrency, FTX Token ("FTT").

FTX's financial troubles began when it lent more than half of its customer funds—about $10 billion—to Alameda Research ("Alameda"), a hedge fund also founded by Mr. Bankman-Fried. Alameda then used these funds to make risky bets and often times used its large FTT holdings as collateral to secure even more loans.

While private investors valued FTX at $32 billion earlier this year, this valuation proved to be a mirage.  After Binance, FTX's main competitor, backed out of a deal to purchase FTX, the company faced a liquidity crisis. News of the failed deal cause the value of FTT to plunge, and the risky investments made by Alameda failed in turn, leaving Alameda unable to pay back FTX the customer funds it had borrowed.  FTX's customers sought to liquidate their holdings and withdraw their money from the exchange but for many, it was too late: FTX simply did not have enough assets to cover these customer withdrawals. 

In a Declaration filed in the bankruptcy on November 17, replacement CEO John J. Ray III reported that upon taking control of FTX on November 11, "[N]ever in my career have I seen such a complete failure of corporate controls and such a complete absence of trustworthy financial information as occurred here."

If you invested in or through FTX, please contact attorney Jason Kellogg at the information above. LKLSG represents clients nationwide.

Attorney Advertising. The law firm responsible for this advertisement is Levine Kellogg Lehman Schneider + Grossman LLP (www.lklsg.com). Prior results do not guarantee or predict similar outcomes with respect to future matters. Opportunities to discuss your particular case are welcomed. All communications are treated confidentially.

LKLSG is a Miami-based commercial law firm providing focused, efficient, and hands-on representation in high-stakes legal proceedings including complex commercial litigation, class actions, bankruptcy and receiverships, lender/borrower litigation and workouts and labor and employment litigation.

CONTACT:
Jason Kellogg, Esq.
[email protected]
P: 786.673.3017

SOURCE Levine Kellogg Lehman Schneider + Grossman