Offchain Lisbon is seeking to bring a class action against FTX and is looking for investors who have been affected.

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Pedro Aguiar and José Reis Santos, founders of the Portuguese chapter of the community dedicated to enthusiasts of blockchain technology and the crypto-currency world, say what steps are being taken to “identify and organize FTX’s aggrieved parties in Portugal”.

In November, FTX declared bankruptcy, leaving unpaid debts to thousands of creditors. More recently, Sam Bankman-Fried, co-founder and former CEO of the crypto-currency brokerage, who had already lost 94% of his fortune overnight, was arrested on suspicion of fraud and money laundering.

The “shockwaves” of FTX’s collapse were heard around the world, with thousands of investors unable to recover their funds. In Portugal, Offchain Lisbon, the Portuguese chapter of the global community dedicated to enthusiasts of blockchain technology and the crypto-currency world, wants to file a class action lawsuit against the brokerage firm.

Pedro Aguiar and José Reis Santos, founders of the community’s Portuguese chapter, explain to SAPO TEK that the action’s first objective is “to identify and organize FTX’s victims in Portugal”.

Next, the organization seeks to “verify the possibilities” for affected investors “to initiate or join a collective action, whether in Portugal, Europe or another jurisdiction of their choice”. “We are still in the process of determining the best jurisdiction in which to place the collective action”, they add.

Currently, the organization is identifying, via an online survey, investors who have been harmed by FTX in Portugal, including people who do not have Portuguese nationality. According to officials, the legal possibilities available in the country and beyond are currently being explored.

For the time being, as it has just begun the process of collecting and identifying injured parties, the organization does not yet have a clear estimate of the number of investors likely to have been affected by the FTX collapse in the country. In addition to Portugal, Offchain Lisbon is also in talks with partners in other countries to take similar action.

The crash that shook the crypto world

Remember that the week before the collapse of FTX, once considered one of the largest crypto-currency brokers, valued at $32 billion, Changpeng Zhao, CEO of its rival Binance, had already hinted publicly that FTX’s financial prospects were not the best.

Anticipating a “doomsday” scenario, many FTX platform users attempted to recover the investments they had made. However, the brokerage had no way of responding to the huge volume of requests. An estimated $6 billion worth of investments were redeemed within 72 hours.

Meanwhile, FTX and Binance had reached a purchase agreement, with Sam Bankman-Fried’s company being sold to alleviate liquidity problems. However, following a review of FTX’s financial documents and the announcement of an investigation into the brokerage firm by US authorities, Binance backed out of the deal and decided not to proceed with the acquisition.

Following the announcement of the bankruptcy in November, it is believed that FTX’s creditors could number up to one million and that the debt could amount to $8 billion. So far, $3 billion in debt has been acknowledged to the 50 largest creditors.

Before he was arrested in the Bahamas, a day before a hearing before the US Congress to explain the platform’s collapse, Sam Bankman-Fried admitted management errors, arguing that the collapse would have been precipitated in large part by the simultaneous mass withdrawal of FTX assets .

On the other hand, according to information that has come to light, a significant amount of funds had been diverted from FTX to another group company, Alameda Research, and some of these assets, amounting to around $1 billion, had disappeared .

As reported in the international press, Sam Bankman-Fried was today brought before a court in Nassau, where he is expected to agree to be extradited to the USA after contesting the possibility. In the USA, the co-founder and former CEO is charged with fraud and money laundering.

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