FTX Fallout Continues: Alameda Research Targets KuCoin in Asset Recovery Lawsuit

In today’s news article, Coinmooner highlights a significant event related to the well-known case involving the cryptocurrency exchange FTX. This case has attracted widespread attention and sparked discussions within the cryptocurrency community and beyond. To learn more about the situation, we invite you to read our article titled "From Market Manipulation to Prison: The Downfall of Sam Bankman-Fried", where we will explore how the events unfolded and what consequences they may have for the entire industry.

It has come to light that Alameda Research, a subsidiary of the bankrupt FTX exchange, recently filed a lawsuit against the cryptocurrency exchange KuCoin to recover frozen assets worth over $50 million. This lawsuit marks another step in the legal process aimed at retrieving the funds that FTX and its subsidiaries lost during bankruptcy. The lawsuit was filed in the U.S. Bankruptcy Court for the District of Delaware, which is handling the liquidation of FTX.

Alameda Research claims that KuCoin froze the company’s funds following FTX's bankruptcy announcement in November 2022. At that time, the amount of frozen assets was $28 million. However, due to the increase in cryptocurrency and token values, these assets have appreciated and are now valued at $50 million, prompting the lawsuit.

Frozen Funds, Legal Struggles: Alameda Research vs. KuCoin Over $50 Million

Coinmooner sought more details about this case and learned from FTX Estate lawyers, who manage the assets of the bankrupt exchange, that KuCoin ignored several requests to return the assets, even though FTX creditors have a legal right to them. The plaintiffs believe that KuCoin’s refusal to return the funds violates U.S. Bankruptcy Code provisions and seek compensation for potential damages caused by the delays.

In an official statement, the lawyers for FTX Estate mentioned that recovering these assets would be used to settle debts with creditors who suffered losses due to FTX's collapse. According to the plaintiffs, this is crucial for successfully concluding FTX's liquidation and repaying affected depositors and investors.

Interestingly, this case is not unique. This week, FTX also settled another lawsuit with the cryptocurrency exchange Bybit, allowing the bankrupt exchange to recover assets worth $228 million. This includes $175 million in digital assets that will be withdrawn from the Bybit platform and about $53 million in BIT tokens, which are now planned to be sold to Bybit's investment division, Mirana.

FTX and Alameda Research plan to continue working on recovering assets needed to pay off their many creditors. This process illustrates how complex liquidation procedures can be in cryptocurrency, especially concerning cross-border transactions and operations on decentralized platforms.

Founded by entrepreneur Sam Bankman-Fried, FTX was one of the largest cryptocurrency exchanges, offering users various services and tools for trading digital assets. However, its sudden bankruptcy and fraud allegations have damaged the crypto industry’s reputation, highlighting the need for careful regulation and security measures.

These events serve as a reminder that in the Web3 industry, every user must exercise caution and always apply the most advanced security practices to protect their financial assets and personal information from fraudulent schemes. As interest in digital assets grows, so does the demand for reliable tools to mitigate risks and attacks that any participant in the decentralized financial ecosystem could exploit.