Unraveling FTX’s $1 Billion Lawsuit Against SBF and Associates

Dive deep into the landmark lawsuit filed by FTX against its founder, Sam Bankman-Fried, and other executives.

Sam Bankman Fried chest deep in a dark and dingy swamp.
Created by Gabor Kovacs from DailyCoin
  • FTX sues its founder, Sam Bankman-Fried, and other executives for over $1 billion.
  • The lawsuit alleges a series of fraudulent transfers led to FTX’s bankruptcy.
  • The case’s outcome could significantly impact the cryptocurrency sector.

In an unprecedented move in the cryptocurrency industry, FTX Trading has filed a lawsuit against its founder, Sam Bankman-Fried, and other former executives. The legal battle, seeking to recoup more than $1 billion allegedly misappropriated, has sent ripples across the industry. 

Unraveling the Billion-Dollar Crypto Lawsuit

On Thursday, July 20, FTX Trading and Alameda Research lodged a legal case against founder Sam Bankman-Fried and former executives including Caroline Ellison, Zixiao “Gary” Wang, and Nishad Singh. 


The allegations center on these individuals misappropriating funds to finance luxury lifestyles and speculative investments, purportedly leading FTX to bankruptcy. The lawsuit states that fraudulent transfers occurred consistently between February 2020 and November 2022, just before FTX’s Chapter 11 filing. 

According to the lawsuit, former executives misappropriated over $1 billion in company funds before FTX filed for bankruptcy. 

The alleged transfers were supposedly used to finance luxury condominiums, political contributions, speculative investments, and other “pet projects,” leading to what FTX termed “one of the largest financial frauds in history.” 

According to FTX, the fraudulent transfers included more than $725 million of equity that FTX and West Realm Shires, a Bankman-Fried controlled entity, awarded “without receiving any value in exchange.” 


FTX also alleges that Bankman-Fried and Wang misappropriated $546 million to buy shares of Robinhood Markets, while Ellison used $28.8 million to pay herself bonuses.

FTX also claimed some of Bankman-Fried’s criminal defense is being funded from a $10 million “gift” he gave his father. 

On the Flipside

  • Bankman-Fried has pleaded not guilty to several criminal charges. At the same time, Ellison, Wang, and Singh have pleaded guilty and agreed to cooperate with prosecutors. 
  • While the allegations are serious, they are yet to be proven in court. 

Why This Matters

This lawsuit is crucial for the crypto industry, particularly for traders and investors associated with FTX. Its outcome could also set a precedent for future regulations in the space. 

Read more about FTX’s plans to restart after its bankruptcy: 

FTX Restart Plans: Everything You Need to Know

Read more about Binance’s latest report on the crypto market: 

Bitcoin Dominates, Crypto Markets Stand Firm: Binance H1 Report

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

David Marsanic

David Marsanic is a journalist for DailyCoin who covers the intersection of crypto, traditional finance, and government. He focuses on institutionalized crypto entities like major cryptocurrency exchanges and Solana, breaking down complex topics into easy-to-understand writing. David's prior experience as a business journalist at various crypto and traditional news sites has enabled him to maintain a critical approach to news while adhering to high journalistic integrity standards.