Nadrich & Cohen is representing those who lost money because of FTX’s bad behavior.
Cryptocurrency exchange FTX recently collapsed. A lot of its investors lost a lot of money when this happened.
Lawsuits allege that FTX was nothing more than a Ponzi scheme. Accusations exist that FTX and others deceived investors about their investments’ safety. Lawsuits allege FTX sold investors unlawful, unregistered securities. Reuters reported that FTX moved customer funds to another company in secret.
Call us today or text us from this page if you lost money due to FTX’s collapse. We offer free consultations and won’t charge you until and unless we recover money for you.
What Happened To FTX?
Samuel Bankman-Fried, Gary Wang and Nishad Singh founded cryptocurrency exchange FTX in 2019. The exchange became very successful in a very short period of time. Customers invested $10-50 billion dollars in it before it collapsed. Bankman-Fried made over $1.35 billion in profit in 2020, according to Bloomberg. Bankman-Fried’s net worth was $26 billion before FTX collapsed.
Before founding FTX, Bankman-Fried founded Alameda Research in 2017. Alameda was a cryptocurrency trading firm. Alameda made money by purchasing crypto in one location then selling it in another.
Bankman-Fried founded FTX in 2019 to fund Alameda. FTX sold tokens known as FTT. These tokens gave customers discounts when they traded crypto.
Alameda served as FTT’s primary market maker. This kept FTT’s price stable and maintained FTT’s value. Alameda used its FTT holdings as loan collateral. Alameda and FTX shared a symbiotic relationship.
CoinDesk, in 2022, released a report which changed everything, though. The report revealed that FTT holdings composed much of Alameda’s wealth. Alameda’s financial security didn’t depend on an independent asset. It didn’t depend on fiat currency or crypto it wasn’t associated with. It depended on a coin invented by its sister company.
This news reached the CEO of Binance, a rival to FTX. That CEO, Changpeng Zhao, then liquidated about $530 million in FTT. Customers pulled out as well. FTX saw about $6 billion worth of withdrawals over 72 hours. FTT’s value plunged by 32 percent.
Bankman-Fried announced that Binance would bail out FTX by buying it. The announcement occurred on November 8, 2022. Binance withdrew from the deal the next day, though. They said a mishandling of customer funds occurred. They cited that a federal investigation was possible.
The news that Binance withdrew from the deal caused FTT’s value to plunge. 94 percent of Bankman-Fried’s net worth disappeared in one day. Reuters reported on November 10, 2022 that FTX transferred customer funds to Alameda. FTX filed for bankruptcy the next day, and Bankman-Fried resigned as its CEO.
Why Are There FTX Lawsuits?
Lawsuits seek to recover financial compensation from Bankman-Fried and others, alleging that:
FTX Sold Customers Unregistered Securities
FTX, starting in 2019, offered investors crypto accounts that would bear interest. These were yield-bearing accounts (YBAs). FTX claimed that these products were not considered securities under the law. Securities offered in the U.S. need registration with the SEC.
Lawsuits claim that FTX’s YBAs were securities under U.S. law, though. It is clear that an investment in unregistered securities is not a safe, wise investment.
FTX Was A Ponzi Scheme Promoted Through Deception
Lawsuits allege that Bankman-Fried and others promoted FTX through deception. They allege that FTX was a Ponzi scheme intended to exploit inexperienced investors.
Lawsuits claim Bankman-Fried and others misled investors about the safety of their investments. They claim investors were mislead into thinking they weren’t buying unregistered securities.
They allege FTX promotions claimed investing in FTX was safe and wise even though:
- FTX’s success depended on Alameda’s success
- FTT holdings were much of Alameda’s wealth
- FTX diverted customer funds to Alameda
- FTX was selling unregistered securities
Lawsuits allege that those who lost their investments in FTX deserve compensation. They seek compensation because of FTX’s allegedly deceptive, fraudulent marketing.
How Much Does a California FTX Lawyer Cost?
We are representing FTX lawsuit clients on a contingency fee basis. This means that we don’t charge a fee until we recover compensation. We don’t charge a fee unless we recover compensation.
In other words, you won’t ever owe us any out of pocket money. You won’t ever owe us any upfront fee.
The only fee we charge is a percentage of any compensation we recover for you.
Can I Join An FTX Class Action Lawsuit?
There is a class action lawsuit against FTX. The lawsuit seeks to recover compensation for investors in FTX. The lawsuit alleges that FTX deceived and defrauded investors.
Nadrich & Cohen can help you join the FTX class action lawsuit. Class action lawsuits are not always the best choice for those who lost money, though. Individual lawsuits are better than class action lawsuits for some. Some can make more money through an individual lawsuit.
Call us today to find out if joining the FTX class action lawsuit is right for you. We can let you know if you’re better off filing an individual lawsuit instead. We can file an individual lawsuit on your behalf if so.
What Can Nadrich & Cohen Do For Me?
Nadrich & Cohen can help recover money for those who lost it due to FTX’s deception and fraud. We dedicate ourselves to assisting those who lost their investments in FTX. We commit ourselves to helping them receive the justice and compensation they deserve.
Our experienced attorneys have extensive knowledge about crypto laws. We have recovered compensation for those we represent in countless different situations. We have a thorough understanding of complicated crypto cases. We commit ourselves to using this expertise to fight for the legal rights of investors.
We are here to help you if you lost money because of FTX’s bad behavior. Don’t wait to seek the justice you deserve. Call us today for a free FTX lawsuit consultation. Our battle-tested attorneys have recovered $350,000,000 for clients since 1990. We are here to help. We will fight to protect your legal rights every step of the way.
We have been helping clients recover compensation for decades. We dedicate ourselves to assisting those affected by FTX’s actions. We can give you the support and reputation you need to receive compensation for your losses.
Call us today to learn more about how Nadrich & Cohen can help you.