A lawsuit was filed on behalf of investors in high yield bearing accounts sold by FTX Entities. Investors FTX high yield bearing accounts and FTT tokens should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 12/07/2022 -- An investor, who purchased an allegedly unregistered security from FTX Trading LTD in the form of a yield-bearing accounts ('YBA") and funded the account with crypto assets to earn interest filed a lawsuit in the U.S. District Court for the Southern District of Florida against Sam Bankman-Fried for participating in FTX Trading LTD d/b/a FTX's offer and sale of allegedly unregistered securities in the form of yield-bearing YBAs to residents of the United States.
The plaintiff seeks to recover damages, declaratory and/or injunctive relief stemming from the offer and sale of FTX Trading's and FTX US's yield-bearing cryptocurrency accounts.
If you invested in high yield bearing accounts sold by FTX Entities or invested in FTT tokens, you have certain options and you should contact the Shareholders Foundation at firstname.lastname@example.org or call +1(858) 779 - 1554.
Beginning in 2019, the FTX Entities began offering interest-bearing cryptocurrency accounts to public investors.
On December 24, 2021, a class action complaint against the now-defunct cryptocurrency trading app, Voyager, alleging that the platform owned and operated by Voyager Digital Ltd. and Voyager Digital LLC was an unregulated and unsustainable fraud.
On July 5, 2022, Voyager Digital Holdings, Inc. and two affiliated debtors filed voluntary petitions for relief under chapter 11 of Title 11 of the United States Code.
On October 14, 2022, the Texas State Securities Board and the Texas Department of Banking objected to an asset purchase agreement submitted in the bankruptcy proceeding In re Voyager Digital Holdings, Inc. et al., Case No. 22-109643 (MEW). In a supporting declaration, the Texas regulators revealed that it was investigating FTX's interest accounts and the sale of unregistered securities.
On November 2, 2022, Coindesk published an article entitled "Divisions in Sam Bankman-Fried's Crypto Empire Blur on His Trading Titan Alameda's Balance Sheet" that disclosed purported concerns relating to Alameda Research and FTX's close relationship, as well as Alameda Research's large FTT holdings.
Over the next week, FTX and Alameda's activities came to light even further. On November 6, 2022, Binance's Chief Executive Officer, Changpeng Zhao announced on Twitter that the world's largest cryptocurrency exchange (i.e. Binance) would liquidate its FTT holdings "[d]ue to recent revelations that have come to light[.]"
On November 8, 2022, The Wall Street Journal published an article entitled "Binance's Deal for Rival FTX Marks Power Shift Amid Crypto Turmoil" which discussed Binance's non-binding agreement to purchase FTX amid FTX's "sudden liquidity crunch".
The following day, on November 9, 2022, The Wall Street Journal published an article entitled "Binance Walks Away From Deal to Rescue FTX," which disclosed to investors that the purchasing agreement between Binance and FTX would not be finalized, leaving FTX in severe danger of insolvency.
On November 11, 2022, FTX filed for Chapter 11 bankruptcy in the federal court in New York in the following action: FTX Trading Ltd., 1:22-bk-11068.
On the above news, the price of FTT has fallen sharply on unusually heavy trading volume.
According to a recent Reuters report, Bankman-Fried secretly transferred at least $4 billion in customer funds from FTX to Alameda without telling anyone, after Alameda was hit with a series of losses, and that the FTX entities lent more than half of its $16 billion in customer funds to Alameda in total, with more than $10 billion in loans outstanding.
FTX maintained that it does not offer for sale any product that constitutes a "security" under federal or state law. However, the plaintiff alleges that YBAs were "securities" as defined by the United States securities laws and as interpreted by the Supreme Court, the federal courts, and the SEC, that the FTX Entities offered variable interest rewards on crypto assets held in the YBAs on the Deceptive FTX Platform, which rates were determined by the FTX Entities in their sole discretion, that in order to generate revenue to fund the promised interest, the FTX Entities pooled the YBA assets to engage in lending and staking activities from which they derived revenue to pay interest on the YBAs, and that these activities make the YBAs a "security" under state and federal law.
The plaintiff says that the lawsuit seeks to hold Defendants responsible for the many billions of dollars in damages they caused and to force Defendants to make them whole.
Those who invested in high yield bearing accounts sold by FTX Entities or purchased FTT tokens have certain options and should contact the Shareholders Foundation at email@example.com or call +1(858) 779 - 1554.
Shareholders Foundation, Inc.
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About The Shareholders Foundation
The Shareholders Foundation, Inc. is a professional portfolio monitoring and settlement claim filing service, , which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. Shareholders Foundation, Inc. is in contact with a large number of shareholders and offers help, support, and assistance for every shareholder. The Shareholders Foundation, Inc. is not a law firm. Referenced cases, investigation, and/or settlements are not filed/reached and/or related to Shareholders Foundation. The information is provided as a public service. It is not intended as legal advice and should not be relied upon.