FTX Bankruptcy Case: Lawyers Seek $323.5 Million Recovery from FTX Europe Leadership
FTX lawyers have filed a court motion seeking the recovery of $323.5 million from the leadership of FTX Europe, which includes Patrick Gruhn, Robin Matzke, Brandon Williams, and Lorem Ipsum UG.
According to court filings submitted on Wednesday, the lawyers allege that the FTX Europe leadership improperly used funds from the crypto exchange to acquire Swiss company DAAG without conducting any due diligence.
The lawyers also claim that the leaders were aware that DAAG had limited business and no intellectual property beyond a business plan.
FTX Group, led by Sam Bankman-Fried, paid approximately $323.5 million for the acquisition of DAAG, which was later rebranded as FTX Europe.
The motive behind the acquisition was to gain access to European regulators in order to obtain licenses for conducting activities in the European Economic Area.
“The FTX Insiders pursued the DAAG acquisition because they believed DAAG’s founders could provide access to European regulators that would allow FTX to obtain the necessary licenses for activities in the European Economic Area,” the FTX lawyers said.
The lawyers also claim that the FTX Europe leadership received excessive earn-out payments and bonuses amounting to approximately $100 million in connection with the acquisition of Cyprus-based investment firm K-DNA.
This acquisition was completed for a mere 2 million euros.
The lawyers argue that the earn-out payments were unwarranted as K-DNA was already licensed to operate in the European Economic Area and was later absorbed into FTX Europe.
Furthermore, the lawyers have requested the court to halt any further payments to the FTX Europe leadership.
According to the court filings, there is still an outstanding balance of $52.5 million.
However,
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