FTX Sues Sam-Bankman Fried, Embed’s Michael Giles, and Silicon Valley VCs

FTX filed multiple lawsuits in the U.S. Bankruptcy Court for the District of Delaware on May 17 to recover funds from former FTX executives including Sam Bankman-Fred and other parties that benefitted from Embed Financial Technologies’s acquisition.

FTX Trading (Debtors), along with Alameda Research and West Realm Shires (Plaintiff) sued former CEO Sam Bankman-Fried, Nishad Singh, and Gary Wang in a lawsuit. FTX also filed separate lawsuits to recover funds from Embed founder Michael Giles and venture capital firms.

FTX Files Lawsuit Against Sam Bankman-Fried to Recover Funds

According to a lawsuit filed in the Delaware bankruptcy court, lawyers representing FTX, Alameda Research, and West Realm Shires seek to claw back $250 million from Sam Bankman-Fried, Nishad Singh, and Zixiao “Gary” Wang. Former executives used FTX customer funds to acquire Embed in March 2022.

The plaintiffs failed to conduct proper due diligence for Embed’s acquisition and overpaid for the acquisition. FTX insiders produced misleading records to cover Alameda’s role in funding the acquisition.

After four months of completing the Embed acquisition, no bidder is willing to pay more than $1 million. Among the 12 bidders, only one has submitted a final bid to buy Embed for only $250,000.

FTX also filed separate lawsuits to claw back funds from Embed founder Michael Giles and early investors that transferred equities and other assets to Sam Bankman-Fried and other parties involved in the acquisition.

The investors in the adversary cases include prominent Silicon Valley firms that held stakes in Embed, including Y Combinator, Bain Capital Ventures, and 9Yards.

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Varinder has 10 years of experience in the Fintech sector, with over 5 years dedicated to blockchain, crypto, and Web3 developments. Being a technology enthusiast and analytical thinker, he has shared his knowledge of disruptive technologies in over 5000+ news, articles, and papers. With CoinGape Media, Varinder believes in the huge potential of these innovative future technologies. He is currently covering all the latest updates and developments in the crypto industry.

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