The recovery from FTX bankruptcy claims could continue for years, says a legal expert, as the company has been left with insufficient funds while having a sheer number of creditors.
Lawyers believe that FTX is litigating multiple clawback claims in attempts to recover money paid during the time before it filed for bankruptcy in November 2022, after it crashed.
This process could last longer than other bankruptcy proceedings that the crypto industry has seen. While this kind of claim involves a large amount of money, it is usually solved outside the court and takes time.
FTX Estate is also trying to claw back funds from the former leadership team while also fighting against a claim of $24 billion brought in by the IRS (Internal Revenue Service).
“Given that some of these transfers are probably very significant and some of them were made to large organizations,” said a lawyer familiar with the matter, “it’s very possible that some of these things could last for a long time.”
Although FTX has already settled a $175 million claim in a mutual advisory complaint with Genesis, it has yet to resolve a $1 billion lawsuit against crypto exchange ByBit while also seeking to recover $71 million from the company’s own philanthropic arm as well as funds used for celebrity endorsements.
There might be more additional complaints in the future concerning FTX investments and its huge political donations, said the lawyer, as “FTX was throwing money all over the place, so there’s a lot of targets.”
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