In a recent development, a collective of cryptocurrency users embroiled in a class-action lawsuit against former FTX CEO Sam “SBF” Bankman-Fried has reached a tentative settlement agreement.
According to court documents filed on April 19, the plaintiffs, who initially sued FTX influencers back in 2022, have opted to continue pursuing their case against FTX promoters. However, they have chosen to pivot their legal strategy by leveraging information gleaned from Bankman-Fried’s criminal trial, rather than persisting with their pursuit of judgment against him individually.
The filing indicates that Bankman-Fried possesses valuable knowledge and information deemed pertinent by the plaintiffs and their legal representatives. This information is expected to bolster their cases against other defendants implicated in the FTX multidistrict litigation. It encompasses insights into the underlying actions at the core of the legal dispute, the nexus to the company’s U.S. headquarters in Miami, Florida, and the involvement of additional defendants across various states where jurisdiction is asserted.
Plaintiffs Set Their Sights on FTX Influencers for Legal Action
Should the court grant approval, the proposed settlement stands to bring resolution to the legal dispute between Bankman-Fried and cryptocurrency users seeking restitution for losses incurred during the collapse of FTX.
Under the terms of the proposal, plaintiffs have extended an invitation to Bankman-Fried to collaborate in prosecuting FTX influencers and facilitating the recovery of victims. This collaboration would involve providing pertinent documents and testimony obtained from his criminal trial. Of particular interest is the potential illumination of the involvement of notable personalities and entities such as Naomi Osaka, Tom Brady, Stephen Curry, and Shaquille O’Neal, who had endorsed the cryptocurrency exchange prior to its demise.
The lawsuit, originally initiated in November 2022 following FTX’s bankruptcy filing, underwent consolidation into its present form in June 2023.
Representing the plaintiffs in this legal endeavor is The Moskowitz Law Firm, renowned for its expertise in handling class-action lawsuits within the cryptocurrency sphere.
On a separate front, Bankman-Fried’s legal team has taken steps to appeal his conviction and sentencing, as evidenced by a notice filed on April 11. Furthermore, they have petitioned for Bankman-Fried to remain detained at the Metropolitan Detention Center in Brooklyn, rather than being relocated to a federal prison in the San Francisco Bay Area. This request is made in light of the perceived necessity for his continued presence to aid in his defense efforts.
SBF Lodges Appeal Against Fraud Conviction and Sentencing
Last week marked a pivotal moment as Bankman-Fried took decisive action by filing an appeal against his conviction and sentencing on charges of fraud and conspiracy.
The former FTX CEO, who faced a month-long trial last November, found himself convicted on seven counts and handed a substantial 25-year federal prison sentence. This legal development has thrust him into the center of a protracted legal battle.
In a notable move, Bankman-Fried’s legal team, in an additional court filing, urged Judge Lewis A. Kaplan to maintain their client’s residence at the Metropolitan Detention Center in Brooklyn. The rationale behind this request was to ensure unimpeded access to his appellate counsel as he endeavors to challenge the verdict and overturn his sentence. Notably, during his sentencing, Bankman-Fried’s legal representatives underscored the dire conditions at the Metropolitan Detention Center, labeling it as “the worst federal jail in the country.” The facility’s inmates have reportedly grappled with issues such as inadequate access to water and unreliable electricity, adding further complexity to Bankman-Fried’s legal saga.
Meanwhile, on a separate front, developments regarding the FTX bankruptcy estate have come to light. In a recent disclosure during a meeting of FTX Digital’s Joint Official Liquidators in the Bahamas, it was revealed that the estate has set a target to commence repayments to customers by the culmination of 2024. This announcement is significant given the intricacies of the FTX bankruptcy proceedings, which encompass two distinct processes: the Chapter 11 bankruptcy under the jurisdiction of a Delaware court in the United States and the official liquidation of FTX Digital, the Bahamas-based subsidiary of FTX. Despite their separate jurisdictions, both entities have committed to fostering collaboration. This collaborative framework ensures that creditors have the opportunity to submit their claims to either party while guaranteeing equitable distribution, thereby safeguarding the interests of all stakeholders involved.
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