Eversheds Sutherland Files Early Summary Judgment for Non-US FTX Clients

It is reported that Eversheds Sutherland, a global law firm, has filed an early summary judgment on assets frozen in the accounts of non US FTX clients, thereby legally distinguishing these funds from those claimed by debtors in the bankruptcy estate. Sarah Paul, partner at Eversheds Sutherland, stated that under the terms of service of the exchange, the temporary group of FTX.com non US customers has a clear and unambiguous ownership of the assets. Erin Broderick, a lawyer for Eversheds Sutherland, pointed out that in other cryptocurrency bankruptcies such as Celsius, Blockfi, and Voyager, debtors have sought to determine client property rights early in the proceedings.

Law firm Eversheds Sutherland applies for ownership of FTX client assets

Introduction

Recently, Eversheds Sutherland, a well-known global law firm, has filed an early summary judgment on assets frozen in the accounts of non-US FTX clients. This action legally distinguishes these funds from those claimed by debtors in the bankruptcy estate. According to Sarah Paul, a partner at Eversheds Sutherland, the temporary group of FTX.com non-US customers has clear and unambiguous ownership of the assets under the terms of service of the exchange. Erin Broderick, a lawyer for Eversheds Sutherland, has pointed out that in other cryptocurrency bankruptcies such as Celsius, Blockfi, and Voyager, debtors have sought to determine client property rights early in the proceedings. In this article, we will explore the implications of this action and what it means for non-US FTX clients.

Background

FTX is a cryptocurrency derivatives exchange that provides futures, options, leveraged tokens, and leveraged positions to its users. The exchange was founded in 2019 by Sam Bankman-Fried, a former quant trader at Jane Street Capital. FTX has gained a reputation for being reliable, fast, and secure, with an impressive trading volume that has been growing rapidly over the past few years.
However, FTX has not been without its challenges. The exchange has faced some legal and regulatory issues in the past, as have many other cryptocurrency exchanges. One particular issue that has come to light recently is the bankruptcy of a former FTX customer, who has claimed that the funds in their FTX account should be part of the bankruptcy estate.

Eversheds Sutherland’s Action

Eversheds Sutherland’s action seeks to differentiate between the funds held by non-US FTX clients and those claimed by debtors in the bankruptcy estate. This move has significant implications for non-US FTX clients, as it helps to establish their ownership rights over their funds. This is particularly important given the complexities of cryptocurrency ownership and the lack of clear legal frameworks in many jurisdictions.
Under the terms of service of the exchange, FTX.com non-US customers have clear and unambiguous ownership of their assets. This means that if a debtor claims that funds held in an FTX account should be part of the bankruptcy estate, Eversheds Sutherland’s action will make it clear that these funds are distinct from those claimed by the debtor. In other cryptocurrency bankruptcies such as Celsius, Blockfi, and Voyager, debtors have sought to determine client property rights early in the proceedings, but Eversheds Sutherland’s action seeks to establish this right from the outset.

Implications for Non-US FTX Clients

As we have already mentioned, Eversheds Sutherland’s action has significant implications for non-US FTX clients. This move provides them with greater legal clarity and protection over their funds, thereby reducing the risk of their funds being frozen or seized in the event of a bankruptcy. It also helps to establish a clearer legal framework for cryptocurrency ownership, which could have wider implications for the industry as a whole.

Conclusion

In conclusion, Eversheds Sutherland’s action is an important step towards establishing clearer legal frameworks for cryptocurrency ownership. By legally distinguishing the funds held by non-US FTX clients from those claimed by debtors in the bankruptcy estate, it helps to establish greater legal clarity and protection for these clients. This could have wider implications for the cryptocurrency industry as a whole and could help to reduce the risks associated with cryptocurrency ownership.

FAQS

Q1. What is FTX?
FTX is a cryptocurrency derivatives exchange that provides futures, options, leveraged tokens, and leveraged positions to its users.
Q2. What is Eversheds Sutherland’s action?
Eversheds Sutherland’s action seeks to differentiate between the funds held by non-US FTX clients and those claimed by debtors in the bankruptcy estate.
Q3. What are the implications of Eversheds Sutherland’s action for non-US FTX clients?
Eversheds Sutherland’s action provides non-US FTX clients with greater legal clarity and protection over their funds, thereby reducing the risk of their funds being frozen or seized in the event of a bankruptcy.