FTX bankruptcy case spreads Alameda sues KuCoin seeking 50 million in cryptocurrency reimbursement
FTX’s bankruptcy case continues to escalate. On October 28, FTX officially filed a lawsuit against the cryptocurrency exchange KuCoin, citing violations of bankruptcy law and demanding the release of $28 million in cryptocurrency assets that were frozen following FTX’s collapse in 2022. With market fluctuations, these assets have now appreciated to over $50 million.
After FTX’s bankruptcy, the entanglement with KuCoin has seen the value rise from $28 million to $50 million.
Since FTX’s downfall in November 2022, trading firm Alameda Research has been attempting to recover assets stored in various cryptocurrency exchanges, including KuCoin. At that time, KuCoin recognized the potential risks and promptly froze FTX’s $28 million in assets. As the market prices changed, this amount has now increased to over $50 million.
KuCoin has claimed that the assets were frozen due to “suspicious activity” detected and stated that they had made multiple attempts to contact the account holder to resolve the issue but received no response. Therefore, KuCoin declared that it would “strictly adhere to law enforcement directives to ensure that user assets are not improperly misappropriated.”
The situation escalated when Alameda accused KuCoin of illegally refusing to return the assets. On October 28, Alameda Research formally filed a lawsuit in the U.S. Bankruptcy Court for the District of Delaware, asserting that KuCoin had violated bankruptcy law and demanding the return of the frozen $28 million. The lawsuit explicitly states that KuCoin has repeatedly refused to return the assets without justification, and it requests that KuCoin immediately return the assets and compensate for delays. Alameda emphasized that these funds belong to the “FTX bankruptcy reorganization funds” and must be used to repay creditors.
FTX successfully recovered $228 million from Bybit, adding to its funds.
According to previous reports, the FTX bankruptcy reorganization team recently reached a settlement agreement with the cryptocurrency exchange Bybit for up to $228 million. This settlement allows FTX to withdraw $175 million worth of digital assets from Bybit and sell approximately $53 million worth of BIT tokens to Mirana Corp (Bybit’s investment arm). However, the settlement still requires federal court approval, with a hearing scheduled for November 20 at 2 PM Eastern Time to approve the agreement. If approved, these settlement funds will be used to repay former FTX users and creditors.
