The lawsuit argued on behalf of the over one million customers that since their assets “never belonged to FTX or Alameda,” they should be returned to their rightful owners rather than be used to pay off creditors.
On Tuesday, a class action lawsuit was filed against FTX and Alameda Research by customers hoping to recoup some of the money they lost following the crypto exchange's collapse.
The lawsuit argued on behalf of the over one million customers that since their assets "never belonged to FTX or Alameda," they should be returned to their rightful owners rather than be used to pay off creditors.
According to the New York Post, the lawsuit petitions a judge in Delaware bankruptcy court to rule that any FTX assets belong to customers, and should be used to pay them back before being handed over to creditors.
"Customer class members," the suit states, "should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda."
FTX co-founder and former CEO Sam Bankman-Fried has been slammed for allowing the company to implode, with some referring to his actions as part of "one of the biggest financial frauds in US history."
While announcing charges against the disgraced crypto bro earlier in December, SEC Chair Gary Gensler said in a press release that Bankman-Fried "built a house of cards on a foundation of deception while telling investors that it was one of the safest buildings in crypto."
A grand jury indicted Bankman-Fried of "knowingly" scheming to defraud investors by moving funds into Alameda Research, which was operated by his then-girlfriend. The DOJ also accused him of breaking campaign finance laws.
Just before Christmas, Bankman-Fried was released on a $250 million personal recognizance, and has been placed on house arrest, remaining at his parents' residence in California while he awaits trial.
If found guilty of his alleged crimes, Bankman-Fried could face up to 115 years in prison.
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