Bankrupt Crypto Exchange FTX Launches Lawsuits Against NFT Stars Limited and Kurosemi Inc.

The bankrupt cryptocurrency exchange FTX has launched legal action against NFT Stars Limited and Kurosemi Inc. (operator of the Delysium platform)

Bankrupt cryptocurrency exchange FTX has launched lawsuits against NFT Stars Limited and Kurosemi Inc. (operator of the Delysium platform) for allegedly failing to deliver tokens as stipulated in investment agreements.

The lawsuits, filed in U.S. Bankruptcy Court in Delaware on Thursday, represent an escalation of FTX’s efforts to recover assets for creditor repayments following its collapse in November 2022.

According to court documents, FTX attempted multiple non-litigation negotiations with both companies before resorting to legal action. These efforts proved unsuccessful, prompting the exchange to pursue formal legal remedies.

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

In the case against NFT Stars, FTX claims it paid $325,000 in November 2021 for rights to 1.35 million SENATE tokens and 135 million SIDUS tokens. While some tokens were initially delivered, NFT Stars allegedly failed to complete further transfers after FTX filed for bankruptcy.

The Delysium complaint concerns a $1 million payment by Alameda Ventures (now Maclaurin Investment) in January 2022 for the right to receive 75 million AGI tokens. These tokens launched in April 2023 with a vesting schedule, but Delysium allegedly extended the schedule unilaterally and refused to transfer any tokens.

Court filings indicate that FTX’s advisors attempted to contact NFT Stars 15 times and Delysium 13 times between June 2023 and September 2024. However, neither company responded meaningfully.

The lawsuits seek immediate return of the assets, damages for breach of contract, and sanctions for alleged violations of bankruptcy protections, including those related to the automatic stay.

“We are also engaging with several other token issuers to return assets to the FTX Estate and will be filing additional lawsuits where parties fail to cooperate,” FTX’s legal team added.

These legal actions are part of FTX’s broader recovery strategy following its dramatic collapse. The exchange filed for bankruptcy after revelations that approximately $8 billion in customer funds had been misused to cover risky bets made by FTX’s affiliated trading firm, Alameda Research.

Sam Bankman-Fried, the founder and former CEO of FTX, was convicted of fraud and conspiracy charges and sentenced to 25 years in prison for his role in the collapse.

On February 18, FTX began its initial distributions of recovered funds to creditors. The first round of payments went to holders of approved claims in FTX’s Convenience Class, which includes claims under $50,000.

The next distribution record date will be April 11, with payments expected to begin on May 30. This second round will include Class 5 Customer Entitlement Claims, Class 6 General Unsecured Claims, and additional Convenience Claims approved since the initial record date.

Last month, 3AC’s claim was increased from $120 million to $1.5 billion after new findings about the firm’s extensive dealings with FTX. The amendment, which was approved despite objections from FTX, brought the total value of approved claims to $2.7 billion.