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.