TechFlow news — FTX’s lawyers have accused former CEO Sam Bankman-Fried, co-founder Zixiao Wang, and former senior executive Nishad Singh of failing to conduct proper due diligence in the $220 million acquisition of stock clearing platform Embed.
FTX paid for the deal through its U.S. subsidiary without conducting comprehensive due diligence. Although 12 entities initially submitted letters of intent, all except Michael Giles, Embed’s founder and former CEO, declined to submit final bids after more thorough due diligence.
FTX’s legal team also alleges that insiders used misappropriated customer funds to facilitate the purchase of Embed and were fully aware the company was insolvent at the time of the transaction. FTX is now seeking to have the deal classified as a "voidable fraudulent transfer and obligation, and/or preference."
