US crypto change FTX has filed a lawsuit in opposition to Dunamu, the operator of South Korea’s largest change Upbit, to get well greater than $53 million in belongings.
The lawsuit, part of the continuing FTX chapter proceedings, was filed by FTX’s subsidiary Alameda Analysis on November 5, 2024, with the US Chapter Court docket for the District of Delaware. The case remains to be pending.
Why Is FTX Suing Dunamu?
The lawsuit filed by FTX in opposition to Dunamu is a “criticism for the return of belongings and violation of computerized keep.” The core of the declare is that Dunamu, by way of its Upbit change, is holding FTX’s belongings and may return them.
In keeping with Alameda Analysis, the corporate opened digital asset storage accounts on crypto exchanges worldwide. It opened these accounts not solely in its personal title but in addition below worker names or shell firms. The aim was to create a kind of secret nominee account.
Unraveling a “Secret Account”
Alameda claims that somebody opened one in every of these secret accounts on Upbit below Yang Jai Sung’s title, and an e mail handle, seoyuncharles88@gmail.com.
FTX alleges the account was a secret Alameda account. That is primarily based on an inside messenger dialog from March 2022, the place an Alameda worker stated, “Upbit authentication is full.” The agency additionally famous that the seoyuncharles88 e mail handle robotically forwarded to an Alameda handle.
Moreover, FTX claims that Yang Jai Sung is the daddy of Charles Yang, the pinnacle dealer for Genesis Block. That is an Alameda affiliate, and the declare relies on a lawsuit between FTX and Genesis Block.
FTX entered chapter proceedings in November 2022 after revelations of buyer fund misuse and accounting irregularities. Misusing buyer funds by way of its affiliate, Alameda, was a big level of rivalry. In consequence, founder Sam Bankman-Fried (SBF) was sentenced to 25 years in jail in March 2024.
FTX claims it requested the return of the belongings from Dunamu a number of instances, however Dunamu has not complied and not using a legitimate cause. FTX made the primary request on November 16, 2022, and a second one in January 2023, however acquired no response.
The Case Heats Up
In keeping with the criticism, Dunamu responded in July 2023, saying it couldn’t even verify the Alameda Analysis account existed. It demanded proof that Alameda Analysis really managed the account.
Though Alameda Analysis offered documentation, Dunamu notified them that the “submitted supplies have been inadequate.” The corporate wouldn’t proceed and not using a doc proving a contract between Alameda and Yang Jai Sung.
FTX defined that SBF’s felony trial testimony included a press release that an “$8 billion debt was hidden by way of the seoyuncharles88 account.”
FTX additionally connected an affidavit from former Alameda Analysis CEO Caroline Ellison. Within the affidavit, she said that “one of many Alameda accounts was an Upbit account registered utilizing the seoyuncharles88 e mail, and Alameda managed, used, and funded this account.”
A Dunamu consultant instructed BeInCrypto that “the questioned account is presently frozen as a result of anti-money laundering points,” including, “Dunamu is within the function of safekeeping the frozen digital belongings.”
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