Former crypto giant FTX made all the headlines last year with its high-profile dissolution case. In the end, its owner Sam Bankman-Fried ended up guilty of fraud and embezzlement, which wasn’t a big surprise considering the facts. But, when everyone thought the saga was over, it seems that it will last for a bit more. Scratch that – a lot more.
According to legal experts, the FTX drama could last for years. There’s a flurry of all kinds of lawsuits coming, not to mention the fact that lawyers are trying to recover the money stolen. There’s over $8 billion at stake, and that’s not the kind of money you find lying around. With so many people and companies involved, it’ll be several years before the dust settles.
A Fallen Giant
This year started on a high note with the Bitcoin prices flying. But, 2023 will be remembered for many crypto scandals. Before the SEC charged Binance a whopping $4 billion, Sam Bankman-Friend and his associates were in the limelight for FTX’s demise. It was a highly publicized case with a lot of drama surrounding it. Over $8 billion went missing from user’s accounts, and a big part of it was used to fuel Bankman-Fried’s lavish lifestyle.
Everyone believed that as soon as he was charged, the case was over. But, that’s not the case. We’re not talking about a few hundred bucks, but crypto transactions worth billions. New stuff is emerging all the time as individuals and companies are fighting over what’s left. On top of that, the IRS just announced that it’s seeking around $24 billion in taxes, which FTX supposedly didn’t pay.
It’s a lot of headaches for Bankman-Friend and his associates and parents. It seems that it’ll go on for a lot longer, possibly years as experts say. That’s not a headache you resolve with an Aspirin, and with a flurry of lawsuits coming their way, what’s left of FTX has a lot of problems to solve.
The good news is that the process is well underway. FTX has settled complaints with crypto firm Genesis. It’s been a major creditor of the FTX-backed Alameda Research. But, that’s only one nail in the coffin. There are similar issues to be resolved with other companies. For example, the company has a lawsuit against crypto exchange ByBit for $1 billion. Similarly, FTX is also trying to recover over $70 million from celebrities it paid for promotion and its own philanthropic arm.
Not a Good Look
Things are definitely not looking great for the former major cryptocurrency exchange. One major issue in the collection of funds is the value of crypto over time. More specifically, lawyers are wondering how to calculate it over time. There has been no law on the value of cryptocurrencies seized in such a case.
One notable example that can be used is the 2014 HashFast bankruptcy. Another big issue is how creditors will need to be paid – crypto or fiat money. Since the value of cryptocurrencies is often rising, FTX’s legal case will take years before its finished.