19/01/2023 Alexander

Discussing the FTX asset recovery process from a legal perspective

In the midst of the unfolding FTX indictments, Pawel Kuskowski, CEO of Gatenox, sat down with some of the top US and UK criminal lawyers to have a thought-provoking discussion about recovering assets from the FTX scandal. The esteemed guests included Adam Kaufmann, Eric Lewis, Anthony Metzer, and Philip Kazantzis, all of whom brought their unique expertise to the table.

What to do if your funds are part of the FTX broadcast?

As they delved into the murky waters of the FTX scandal, they drew comparisons to the Madoff Ponzi scheme and even discussed the extradition and sentencing of Sam Bankman-Fried. The conversation began with the question:of what customers who had funds in the FTX broadcast could do, given that it looked like at least eight billion dollars of customer funds were funnelled out of FTX into Alameda, and the funds were subsequently used to make large and risky bets.

“These are personal assets, not deposits in a bank, which would just be treated as a debt, and you’d be a general creditor if you lost money as an FTX customer. I think what I would be trying to do is file lawsuits, either joining a number of class actions or filing my own, asking for an injunction on any payout to anybody and seeking first priority for my deposits.” – Eric Lewis

The speakers agreed that the recovery of these funds would be a complicated and challenging process, and that there was a high likelihood that customers would ultimately be disappointed with the total pool of recoverable funds. With billions lost, a recovery of 100-150 million dollars would not go very far. However, despite the difficulties of the situation, the speakers remained optimistic that more interesting things would yet come out from the FTX case, and that it was important to understand who put the money and supported the entire project.

If you’re interested in learning more about the FTX asset recovery process from a legal perspective, be sure to check out the full discussion on YouTube.

Watch the whole discussion:

* FTX, a digital currency exchange, is known for its low trading fees and aggressive market strategies. In 2021, while many crypto firms went bankrupt, FTX managed to thrive. However, the leak of Alameda Research’s balance sheet revealed that FTX was vulnerable due to its connection to Alameda Research, which had its own tokens called FTT. This led to a crash in the price of FTTs and FTX took a hit as funds moved from FTX to Alameda.

Adam Kaufmann is an American attorney and former prosecutor. He is currently a partner at the law firm of Lewis Baach Kaufmann Middlemiss PLLC, where he specializes in complex criminal and civil litigation.

Prior to joining Lewis Baach Kaufmann Middlemiss, Adam Kaufmann worked as a prosecutor in the Manhattan District Attorney’s Office for over a decade. During his time as a prosecutor, he served in a number of roles, including Chief of the Investigation Division, Chief of the Trial Division, and Executive Assistant District Attorney.

Eric Lewis is an American attorney who specializes in international law, human rights, and complex litigation. He is the founder and managing partner of Lewis Baach Kaufmann Middlemiss PLLC, a law firm with offices in New York, Washington, D.C., and London.

Throughout his career, Eric Lewis has represented clients in a wide range of high-profile cases, including matters involving international human rights violations, terrorism, and financial fraud. He has also advised governments, corporations, and individuals on complex legal issues related to international law, national security, and foreign relations.

Anthony Metzer QC is Head of Chambers of Goldsmith Chambers, a leading multi-disciplinary set, and has a door tenancy at Exchange Chambers. He has been a fee-paid Immigration Judge since 2002 and he sits regularly. His wide practice includes civil, in particular claimant actions against the police and public authorities; criminal; immigration; and inquests law. He specialises in cases which have a human rights and civil liberties dimension. He acted in a number of the leading Caribbean death row Privy Council appeals including the landmark case of Pratt and Morgan[1994]2 AC 1 which determined that all persons on death row for over five years cannot be executed as that would be unconstitutional which has resulted in hundreds of convicts being reprieved.

Anthony is a Queen’s Counsel (QC), a prestigious title given to senior barristers in recognition of their outstanding advocacy skills and expertise.

Philip Kazantzis Having worked as a Criminal Defence Solicitor at partner level as well as an independent Criminal Defence Barrister. Not being a partner at a law firm allows Philip to continue to focus on the wholly legal aspect of his Advice, Litigation and Advocacy work as opposed to the management of an office. Although Philip works independently, he is also a door tenant at Church Court Chambers

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FTX: A Case Study of a Major Failure in Corporate Controls and Compliance