AUSTIN, Texas–(BUSINESS WIRE)–Entwistle & Cappucci LLP, a national firm specializing in complex fraud and bankruptcy litigation, led the recovery of billions of dollars for customers in connection with both the MF Global and Madoff frauds. MF Global (where customer funds were diverted by senior management to meet failed investment bets by corporate management, ultimately resulting in MF Global’s bankruptcy) and Madoff (where billions of dollars in customer funds were diverted by Madoff in an enormous Ponzi scheme resulting in the bankruptcy of the Madoff entities) bear an uncanny resemblance to the misuse and diversion of customer funds at FTX.
Our early investigation confirms what has been reported by Reuters and other outlets, that insiders confirm billions of dollars of customer funds were wrongly diverted from FTX to Alameda and elsewhere leaving an enormous shortfall in customer accounts. While sources speculate that the shortfall is between $1-2 billion, review of certain company documents – including the balance sheet recently disclosed by CoinDesk – makes clear the shortfall may be much larger. Many of those assets are other currencies with significantly lower market values than reflected, include FTT holdings (which may have increased by a recent and questionable new issue by FTX) and involve a number of illiquid investments where there is as yet no confirmation of stated market values. Liabilities are also certain to be greater than reflected…
