FTX initiates legal action to recover creditor asset from NFT Stars and Kurosemi

Bankrupt cryptocurrency exchange FTX and its recovery trust have filed two lawsuits against blockchain firms, NFT Stars, an NFT marketplace, and Kurosemi, the parent company of Delysium, an AI agent blockchain platform, in an attempt to recover assets that reportedly belong to it. 

FTX was once a leading global exchange, and its collapse in November 2022 shook the crypto world. It filed the legal actions in the U.S. Bankruptcy Court for the District of Delaware, where it claims that the assets it’s fighting for belong to it as a result of the Simple Agreements for Future Tokens (SAFTs) it reached with both companies.

SAFTs are the crypto version of Simple Agreements for Future Equity (SAFE).

A war between creditors and debtors

In its lawsuits,  FTX accuses NFT Stars and Kurosemi (Delysium) of breaching agreements to return certain digital tokens. The plaintiff claims both companies failed to uphold terms written into investment contracts during the now-defunct exchange’s pre-bankruptcy operations.

The lawsuit alleges that the company retained the tokens without justification and that attempts to resolve the matter without litigation were unsuccessful.

NFT Stars, a marketplace focused on digital art and collectibles, allegedly received assets under agreements with FTX but never returned them after the exchange entered bankruptcy. It claims it gave NFT Stars $325,000 in November 2021 in exchange for 1.35 million SENATE tokens and 135 million SIDUS tokens.

NFT Stars reportedly remitted some of the tokens pre-bankruptcy but put a hold on the other transfers after FTX declared bankruptcy.

Kurosemi is also accused of benefiting from agreements with the Alameda Ventures affiliate while failing to return digital assets after being requested to do so post-bankruptcy. Kurosemi reportedly received $1 million in January 2022 and agreed to provide FTX with 75 million $AGI tokens.

The tokens were launched in April 2023, months after FTX filed for bankruptcy, and Kurosemi has since failed to remit any tokens to the exchange.

FTX estate said, “We urge token and coin issuers to return assets that rightfully belong to FTX, and are willing to initiate litigation barring adequate engagement.”

A potential restitution for FTX creditors

Since its bankruptcy, FTX has filed multiple similar lawsuits to recover assets that could contribute to its pool of funds for creditor reimbursement. The strategy is driven by the need to restore as much value as possible to thousands of retail and institutional investors left in limbo following the platform’s collapse.

FTX has indicated in the past that it will be returning a substantial portion of customer and creditor funds. However, the exact figures remain unclear due to ongoing legal claims and the complex nature of crypto asset valuation.

The estate added, “Our team continues to work tirelessly to maximize recoveries for the FTX Estate and return funds to creditors, including by filing two complaints against issuers who have repeatedly ignored our attempts to engage.”

The cases against NFT Stars and Kurosemi are expected to proceed in the coming months. The outcome of the litigation is uncertain, but the FTX estate lawsuits are the newest chapters of one of the most complex corporate bankruptcies in the crypto space.

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