In a startling revelation that has rocked the legal fraternity, it has surfaced that FTX, prior to its downfall, falsely assured customers of the safety of their funds should insolvency befall them, according to reports by Bloomberg Law.
The information comes via Can Sun, who served as a general counsel for FTX starting from August 2021, prior to which, the company had even communicated with institutional customers, notably hedge fund Sculptor Capital Management, promising that their funds would be “ringfenced” in case of bankruptcy. An email exchange attesting to the same has since come to the limelight during court proceedings.
This revelation has come about during the trial of Sam Bankman-Fried and can potentially have far-reaching legal implications for the parties involved. Can’s statements in a federal court on Thursday lends credence to the allegations, thereby adding a significant twist to the ongoing trial and potentially affecting the legal dynamics at play amidst the FTX fallout.
Further details of the FTX communication saga continue to be unveiled, which prove increasingly critical for the institutional customers affected. It remains to be seen how these revelations will ultimately shape the course of the trial and the future of the companies and individuals involved.