FTX Files Lawsuit Against NFT Stars and Delysium

FTX Trading Ltd. and the FTX Recovery Trust have initiated legal proceedings against NFT Stars Limited and KUROSEMI INC., which are responsible for the Delysium gaming platform. They allege a breach of contract for failing to deliver tokens owed to the FTX estate.

The complaints filed with the Delaware bankruptcy court allege that both NFT Stars and KUROSEMI INC. are violating their contractual obligations by withholding assets that FTX holds, which are crucial to its ongoing recovery efforts. Before resorting to litigation, the crypto exchange reports that it has made multiple attempts to engage with both NFT Stars and Delysium to resolve the matter amicably.

“FTX is in the process of contacting numerous other token and coin issuers regarding FTX assets and will be filing additional suits against non-responsive parties. FTX urges these parties to respond timely to avoid litigation,” FTX said on X.

FTX’s Assets Recovery Process

The FTX legal team from Sullivan & Cromwell LLP says more lawsuits are likely to follow if other companies don’t help them recover the money. They are reaching out to token and coin companies and plan to sue those who don’t respond.

These lawsuits are happening as FTX starts its second round of payments to creditors. After a court-approved plan in October 2024, FTX plans to repay 98% of its creditors, equivalent to giving them 119% of what they initially claimed. The next set of payments, for both Customer Entitlement Claims and General Unsecured Claims, will start on May 30th.

In November 2022, FTX experienced a swift collapse after it was revealed that its founder, Sam Bankman-Fried, had misappropriated $8 billion in customer funds. Under the leadership of John Ray III, a bankruptcy specialist, FTX has recovered between $14.5 billion and $16.3 billion.

Not the First

In October 2024, the company handling the bankruptcy of the crypto exchange FTX, through its related trading business Alameda Research, sued the trading platform KuCoin over digital assets worth millions.

Alameda Research is pursuing the recovery of $50 million in cryptocurrency held in KuCoin’s accounts, according to a court document filed in the U.S. Bankruptcy Court for the District of Delaware, where FTX’s bankruptcy proceedings are ongoing.

The company also wants KuCoin to pay for the lawsuit, including lawyer fees, interest, and extra damages for breaking the rules of the Bankruptcy Code.

Notably, Alameda Research stated it possessed a KuCoin account before the latter’s collapse in November 2022. Alameda paid for, managed, and registered the account under its name.

The post FTX Files Lawsuit Against NFT Stars and Delysium appeared first on Cointab.