FTX Initiates Lawsuits Against Notable NFT Personalities and Kurosemi to Retrieve Lost Assets
Crypto Mega-Exchange FTX Takes Legal Action Against NFT Stars and Delysium
In a bold move to recover assets for creditor payouts, the defunct cryptocurrency titan FTX has filed lawsuits against NFT Stars Limited and Kurosemi Inc., the operator of the Delysium platform. This action forms part of FTX's ongoing recovery strategy.
These legal battles stem from the alleged failure of NFT Stars and Delysium to deliver tokens as stipulated in previous contractual agreements.
FTX squares off with NFT Stars and Delysium
FTX's latest press release reveals multiple unsuccessful attempts at non-litigation negotiation with both entities. Nevertheless, these discussions did not yield any positive results.
Additionally, FTX has made it clear that it's engaging with several other token issuers to recover assets. The company warns that more lawsuits will be filed against those who fail to cooperate.
"We urge token and coin issuers to return assets that rightfully belong to FTX, and are willing to initiate litigation barring adequate engagement. Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors, including by filing two complaints against issuers who have repeatedly ignored our attempts to engage," The FTX Estate's statement read.
These lawsuits signal a significant escalation in FTX's strategy to reclaim assets following its bankruptcy filing in November 2022. A liquidity crisis and an $8 billion shortfall in its accounts triggered the exchange's collapse.
FTX Distributes Recovered Funds
On February 18, 2025, FTX initiated its initial distributions of recovered funds to holders of approved claims in FTX's Convenience Class. The exchange also announced that the next distribution record date will be April 11, with payments expected to begin on May 30.
This second round of payments will include Class 5 Customer Entitlement Claims, Class 6 General Unsecured Claims, and additional Convenience Claims approved since the initial record date. This distribution forms part of a broader plan to repay creditors.
Last month, FTX faced another setback as Three Arrows Capital's (3AC) claim was raised from $120 million to $1.5 billion. The amendment followed new findings about 3AC's extensive dealings with FTX. Despite objections from FTX, the claim was approved.
Meanwhile, FTX's collapse serves as a stark reminder of the systemic risks within the crypto industry. To avoid such situations, US Senators have proposed the PROOF Act earlier this month.
The bill mandates that crypto exchanges keep customer funds separate from institutional assets. It also requires exchanges to submit monthly audits, dubbed "Proof of Reserves," conducted by neutral third-party firms, helping to ensure transparency, verify asset availability, and bolster consumer protection.
Uphold/eToron/Plus500/Coinbase/Moonacy
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Insights:
- FTX's lawsuits against NFT Stars Limited and Kurosemi Inc. accuse them of breaching contractual agreements by withholding assets, specifically in terms of Simple Agreements for Future Tokens (SAFTs).
- FTX's attempts at non-litigation negotiation with both entities were unsuccessful.
- The complaints were filed in the U.S. Bankruptcy Court for the District of Delaware.
- FTX's failures had resulted in significant financial losses to creditors, and these lawsuits mark part of ongoing efforts to recover assets to repay them.
- The success of these lawsuits could significantly impact the amount FTX can recover and potentially distribute to creditors.
- There is no detailed public response from NFT Stars or Kurosemi available at present, but they may contest the accusations or seek settlements as the legal proceedings unfold.
- The defunct cryptocurrency titan FTX has taken legal action against NFT Stars Limited and Kurosemi Inc., operator of the Delysium platform, over alleged failure to deliver tokens as stipulated in previous contractual agreements.
- FTX has made multiple unsuccessful attempts at non-litigation negotiation with both entities but these discussions did not yield any positive results.
- FTX has warned that it will file more lawsuits against those who fail to cooperate, as part of its ongoing strategy to recover assets for creditor payouts.
- The FTX Estate's statement urges token and coin issuers to return assets that rightfully belong to FTX, and it is ready to initiate litigation barring adequate engagement.
- FTX's lawsuits signal a significant escalation in its strategy to reclaim assets following its bankruptcy filing in November 2022.
- FTX's distribution of recovered funds to creditors began on February 18, 2025, and includes Class 5 Customer Entitlement Claims, Class 6 General Unsecured Claims, and additional Convenience Claims approved since the initial record date.
- The ongoing legal battles and FTX's recovery strategy highlight the need for increased regulation in the crypto industry, with the PROOF Act proposal mandating that crypto exchanges keep customer funds separate from institutional assets and submit monthly audits.
