A defendant group has appointed international law firm Herbert Smith Freehills to defend against clawback claims totalling US$950 million made by the FTX Bankruptcy Estate.

The international team advising these defendants is led by Herbert Smith Freehills Prolegis’ Director Daniel Chia in Singapore and Herbert Smith Freehills partner Peter Behmke in New York.

The defendant group comprises individuals and an executive associated with Mirana Corp. The claims allege that these defendants’ VIP status on the FTX exchange allowed them to pressure FTX employees to fulfil withdrawal requests in advance of the bankruptcy filing in preference to other customers.

“This is a fast-developing aspect of bankruptcy law as it applies to cryptocurrency structures, companies and customers,” said Mr. Behmke. “While different classes of investors and creditors are clearly understood in traditional bankruptcy proceedings, the speed and global digital structure of the cryptocurrency industry, the as yet undefined nature of cryptocurrency as an asset class, and the use of computer algorithms to allegedly prefer one class of creditors over another add additional complexity to this case.”

The case is FTX Trading Ltd., 22-11068, in the US Bankruptcy Court for the District of Delaware.

Key Contacts

Daniel Chia
Daniel Chia
Director, Singapore
+65 68121363
Jonathan Tang
Jonathan Tang
Director, Singapore
+65 68121365

Disclaimer

Herbert Smith Freehills LLP has a Formal Law Alliance (FLA) with Singapore law firm Prolegis LLC, which provides clients with access to Singapore law advice from Prolegis. The FLA in the name of Herbert Smith Freehills Prolegis allows the two firms to deliver a complementary and seamless legal service.