FTX is suing the founders of Digital Assets AG (DAAG), which it acquired for $400 million, seeking to recover $323.5 million for a ‘massive overpayment.’
In a strange turn of events, FTX has filed a lawsuit against its European arm. The lawsuit was filed on July 12 and claims that FTX founder Sam Bankman-Fried and associates had used the funds to enrich themselves instead of actually expanding into Europe.
FTX Sues Itself Hoping for $323.5M Recovery
FTX made multiple investments in Europe before it filed for bankruptcy. It had acquired Digital Assets AG (DAAG), which became FTX Europe. The acquisition was made for $400 million.
The filing states that FTX had executed a “massive overpayment” despite knowing it did not have much of a business plan.
The European division of FTX is facing trouble following the collapse of the Sam Bankman-Fried-led crypto exchange. Check out our in-depth analysis to learn more about what led to the meltdown of FTX: FTX Collapse Explained: How Sam Bankman-Fried’s Empire Fell
Specifically, the lawsuit is hoping to recover $323.5 million from Patrick Gruhn and Robin Matzke, the founders of Digital Assets AG (DAAG). They remained to lead FTX Europe after the acquisition. It also seeks to reclaim friends from Brandon Williams, a managing director at Cosima Capital, who was involved in the acquisition process.
Lastly, the lawsuit also names Lorem Ipsum Holding UG, a German holding company owned by Matzke.
FTX Europe was established after FTX made three transactions amounting to $400 million in 2020 and 2021. Digital Assets AG (DAAG) was headquartered in Zurich, Switzerland.
A Swiss court had also decided that FTX was free to explore selling FTX Europe. The court has also appointed an administrator for FTX Europe AG. The latter had filed a petition for a moratorium proceeding.
FTX Hopes to Relaunch International Arm of Exchange
There continue to be many developments regarding FTX. Perhaps most significantly, the portal that allowed victims of the FTX bankruptcy to make claims went offline. It happened just an hour after it went live.
The portal allowed users to access account information and submit claims. Users on social media began complaining that they could not access the portal shortly after it launched.
It was also revealed that NFT legend Tom Brady lost a whopping $30 million when FTX went bankrupt. Brady had promoted the exchange and received $30 million in shares.
Meanwhile, FTX is working towards relaunching the international arm of its crypto exchange. The Wall Street Journal reported that FTX had “started the process of soliciting interested parties to the reboot of the FTX.com exchange,” citing current CEO John Ray.
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