FTX Cryptocurrency Collapse Attorney
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FTX formerly acted as a cryptocurrency exchange where people could buy and sell cryptocurrency digital assets like Bitcoin and Dogecoin. It was launched in May 2019 by Sam Bankman-Fried and Gary Wang, after Bankman-Fried co-founded Alameda Research, a crypto hedge fund. Unfortunately, FTX collapsed over a 10-day period in November 2022, eventually leading to a number of FTX cryptocurrency exchange lawsuits.
On November 2nd, cryptocurrency news site CoinDesk revealed that Alameda Research “held a position valued at $5 billion in FTT, the native token of FTX” and “disclosed that Alameda’s investment foundation was also in FTT, the token that its sister company had invented, not a fiat currency or other cryptocurrency,” according to Investopedia. Concerns arose regarding Bankman-Fried’s companies’ undisclosed leverage and solvency, and FTX’s financial stability overall.
Once Changpeng “CZ’’ Zhao, the CEO of the crypto platform Binance, announced on November 6 that his company would sell off all its FTT tokens, many FTX customers started to withdraw their assets from the FTX cryptocurrency exchange, leading to a major liquidity crisis for the company. Ultimately, the exchange filed an emergency Chapter 11 bankruptcy petition in Delaware on November 11, 2022.
Around the same time, evidence came to light that Bankman-Fried had been transferring FTX investors’ money into his Alameda Research investment firm for trading use, which lost an immense amount of money on risky investments. The cryptocurrency exchange’s use of customer funds was not legal, and Bankman-Fried was arrested and is currently facing criminal charges.
Millions of investors could now have their money caught up in a long, complicated bankruptcy process. Many have been filing FTX cryptocurrency exchange lawsuits against entities including FTX Trading Ltd., Bankman-Fried, and even celebrities and other famous personalities who endorsed or promoted the cryptocurrency exchange platform.
After FTX filed for bankruptcy, investors saw their access to billions of dollars in assets suddenly frozen. Customers were left unable to withdraw their funds and in alarming financial positions. The mismanagement of FTX cryptocurrency exchange funds could eventually lead to massive financial losses for an untold number of individuals.
If you or a loved one was impacted by the collapse of FTX, you could be eligible for financial compensation. The team of attorneys at Phillips Law Group can help you build a case and investigate your FTX cryptocurrency exchange collapse losses.
The initial, no-obligation case evaluation of your situation with our office is free – that means you pay nothing in fees or expenses unless we move forward with a case, and you recover compensation.
Please contact us by calling 602-222-2222 or by filling out the form on this page to learn more about your potential eligibility for an FTX cryptocurrency lawsuit.
or call us at (602) 258-8888
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Why did the FTX Cryptocurrency Exchange Collapse?
Ultimately, the FTX cryptocurrency exchange collapsed because of a liquidity crisis. Rumors about money mismanagement and the CEO of the crypto platform Binance saying he would sell his FTT tokens prompted panic among investors and a bank run.
FTX filed for bankruptcy in November 2022, after having previously been the third-largest cryptocurrency exchange by volume.
Have a question about a potential case?
or call us at (602) 258-8888
Who is Being Sued in FTX Lawsuits?
On November 16, a class action lawsuit was filed in a Florida federal court, alleging that FTX founder Sam Bankman-Fried created a fraudulent cryptocurrency scheme targeting specific groups called “unsophisticated investors” for the exchange.
A number of high-profile celebrities and other famous personalities endorsed the platform and were named in that lawsuit, including Steph Curry, Shaquille O’Neal, Naomi Osaka, Larry David, Kevin O’Leary, and Tom Brady.
In one class action lawsuit filed in December 2022, FTX founders Sam Bankman-Fried and Gary Wang are named as defendants alongside Caroline Ellison, former CEO of FTX’s hedge fund, Alameda Research.
Financial compensation through an FTX cryptocurrency exchange lawsuit may be available for individuals who invested in crypto through the exchange, suffered losses, and are now dealing with frozen assets. Please contact Phillips Law Group to see how our lawyers can assist you.
Have a question about a potential case?
or call us at (602) 258-8888
How Many FTX Cryptocurrency Exchange Lawsuits Are There?
FTX cryptocurrency lawsuits of individuals looking to recover damages for customers are ongoing. In June 2023, the Judicial Panel on Multidistrict Litigation centralized all claims brought throughout the federal court system over the collapse of the cryptocurrency exchange before one judge and worked out consolidated pretrial proceedings in the Southern District of Florida, according to AboutLawsuits.
On June 7, 2023, that outlet reported there were currently eight FTX cryptocurrency exchange lawsuits pending in two different districts, with 11 related actions filed in four other districts.
The number of FTX cryptocurrency lawsuits is expected to grow. Please contact Phillips Law Group without delay if you or a loved one was impacted by the collapse of FTX and you need to explore your legal options.
Have a question about a potential case?
or call us at (602) 258-8888
How Much Does an FTX Cryptocurrency Lawyer Cost?
If you were impacted by the FTX cryptocurrency exchange collapse, please contact Phillips Law Group for a free evaluation. Our team to discuss any possible legal steps you can take with you in a free, no-obligation consultation.
We handle cases on a contingency basis at Phillips Law Group. That means we do not require money upfront, and there is no risk in giving our team a call to talk about your circumstances and potential legal options.
We can assure you your information will remain confidential. And unless we pursue and win your FTX cryptocurrency case, you owe us nothing. Please contact our law firm to learn more today!
Have a question about a potential case?
or call us at (602) 258-8888
