A group of former FTX customers have filed a lawsuit to get priority access to frozen funds of the exchange for its customers and not investors, as reported by Cointelegraph.
According to Cointelegraph, on December 27, 2022, the lawsuit was filed at the United States bankruptcy court for the District of Delaware. It is believed that four plaintiffs made the claim to represent entire group of former FTX customers, which can reach up to one million individuals. Insights from the lawsuit emphasised on the priority rights to return digital assets held by FTX US or FTX.com to its customers.
On the basis of information by Cointelegraph, the plaintiffs mention that FTX User Agreement prevented the platform from utilising customer funds for its own needs. As stated in the complaint, any removal of customer funds from accounts was an “impermissible co-mingling, misappropriation, misuse, or conversion of customer property.”
“Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda,” the lawsuit highlighted.
Moreover, Cointelegraph noted that the Department of Justice has started an investigation around $372 million in missing digital assets from FTX. On November 12, 2022, FTX warned customers of unaccounted wallet activity for around 228,523 Ether transferred out of the exchange from an anonymous perpetrator.
(With insights from Cointelegraph)