FTX's Alameda Research Sues KuCoin to Recover $50 Million in Frozen Assets

Alameda Research, a subsidiary of the collapsed crypto
exchange FTX, has initiated legal action against KuCoin to reclaim over $50
million in assets. The lawsuit was filed yesterday (Monday) in the US
Bankruptcy Court for the District of Delaware.

Alameda Seeks Frozen Funds

According to court documents, KuCoin froze these assets
after FTX’s collapse in November 2022. At the time, the assets were worth
approximately $28 million, but market changes have since increased their value.

The assets are considered part of the FTX estate and, as such, are intended for
creditor repayments. KuCoin has not yet issued a response regarding the
lawsuit.

In the lawsuit, FTX claims: “KuCoin has without
justification refused to turn over the assets in the Account to the Debtors,
despite numerous requests.”

Alameda Research asserts that KuCoin’s refusal to return the
assets violates bankruptcy laws. They are requesting the return of the funds,
along with additional compensation for the delays.

🔴 FTX lance une action en justice contre KuCoin pour récupérer 50 millions de dollars d’actifs pic.twitter.com/3zVzfYHhCf

— Le Crypto Daily 🧡 (@LeCryptoDaily) October 29, 2024

Judge Approves FTX Repayment

This lawsuit follows a recent settlement by FTX with Bybit,
where FTX recovered $228 million in assets to support its repayment efforts.

Earlier in October, a US judge approved FTX’s plan to cease operations and
begin creditor payments. This plan reportedly aims to repay 98% of creditors,
promising up to 119% of the amounts initially claimed based on asset values
during FTX’s collapse.

Earlier, Finance
Magnates reported that Prager Metis, the accounting firm that audited FTX, will
pay $745,000 in civil penalties to resolve misconduct allegations from the
Securities and Exchange Commission (SEC) regarding its audits of the collapsed
crypto exchange.

The firm will also pay $1.2 million related to a second
investigation into independence rule violations during audits of over 200
companies from 2017 to 2020. The SEC noted negligence-based fraud in two audit
reports for FTX and identified failures in compliance with auditing standards
and its own procedures.

This article was written by Tareq Sikder at www.financemagnates.com.
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