The defendants, according to FTX, engaged in fraudulent and preferential asset withdrawals from its platform.
According to a Sept. 21 court document, FTX has filed a legal action to recover $157.3 million from the former workers of its Hong Kong affiliate, Salameda.
FTX Legal Action
Former Salameda employees Michael Burgess, Lesley Burgess, Kevin Nguyen, Darren Wong, and Matthew Burgess were identified as defendants in the insolvent exchange.
The lawsuit also names 3Twelve Ventures Ltd and BDK Consulting Ltd, two companies affiliated with the defendants.
FTX claimed that the defendants participated in fraudulent and preferential asset withdrawals from both FTX and FTX.US, a worrying occurrence that occurred 90 days before the exchange filed for bankruptcy.
Michael Burgess, Nguyen, and Wong were among those who had legally disassociated themselves from FTX Group and its affiliate in January 2022.
Nonetheless, they kept aggressively trading digital assets on the FTX and FTX.US platforms throughout 2022, using personal and business accounts to perform deals with an average monthly trading volume of more than $100 million.
FTX’s Imminent Collapse
As word spread about FTX’s imminent collapse, Michael Burgess, Nguyen, and Wong were among those attempting to withdraw their funds. FTX claimed that they used their contacts with other FTX group workers to arrange the asset withdrawals.
Significantly, one of the defendants, Matthew Burgess, worked for FTX during this time and was instrumental in expediting pending withdrawal petitions.
Michael Burgess’ FTX US Accounts
This included taking control of one of Michael Burgess’ FTX US accounts. Notably, Matthew Burgess is accused of using his position as an employee to expedite withdrawals for his brother, Michael, and mother, Lesley.
Meanwhile, the FTX estate liquidator has filed a second case this week to reclaim assets. They had already sued Sam Bankman-Fried’s parents, Joseph Bankman and Barbara Fried.
The goal is to recoup millions of dollars, with FTX stating that they profited from their son’s fraudulent actions and used their connections and clout within the FTX Group to their advantage.
To read our blog on “Japan made a law to allow Co. to raise funds via DIGI Assets,” click here
