Crypto exchange FTX is looking to recoup $323 million from Patrick Gruhn, Robin Matzke, Brandon Williams, and Lorem Ipsum UG, the leadership of FTX Europe.
In a court filing on Wednesday, lawyers asked a U.S. bankruptcy court in Delaware to stop the remaining amount of payments to the defendants who have already received millions of dollars worth of funds tied to FTX’s acquisition of DAAG.
DAAG, or Digital Assets AG, is a Swiss-based firm that former CEO Sam Bankman-Fried and other FTX insiders such as Gary Wang, Nishad Singh and Caroline Ellison acquired for $376 million in 2021 and eventually came to be known as FTX Europe.
The group used misappropriated funds from the crypto exchange to acquire DAAG without conducting any due diligence and being well aware that the firm had no intellectual property beyond a business plan, FTX’s lawyers overseeing the firm’s bankruptcy proceedings alleged in the filing.
“The FTX Insiders pursued the DAAG acquisition because they believed DAAG’s founders could provide access to European regulators that would allow FTX to obtain the necessary licenses for activities in the European Economic Area,” said the FTX lawyers.
As per the terms of the acquisition, Matzke and Gruhn, the acting leadership of FTX Europe were contractually entitled to over $100 million in earn-out payments and bonuses for acquiring a Cyprus-based investment firm K-DNA, for which they paid a mere 2 million euros.
Last month, the FTX debtors disclosed that they had recovered $7 billion in assets for creditors and earlier this week the firm opened a portal for creditors to register claims.
