By George Ward
The ongoing battle between cryptocurrency exchange FTX and its customers has been playing out in the courts lately. The latest development is the judge’s refusal to consolidate several class-action lawsuits against the exchange.
Customers affected by the platform’s alleged improper handling of funds filed class-action lawsuits against FTX. The lawsuits alleged that FTX had failed to provide adequate customer service and had also failed to protect customer funds adequately.
The federal judge declined to join together multiple legal actions brought against the FTX exchange by investors. The judge ruled that the exchange and its defendants had not yet been allowed to present their case.
This outcome is a setback for the plaintiffs in the class-action lawsuits against FTX, but it is far from the end of the story. The cases will proceed to trial, and the court will ultimately decide on the merits of each case.
The Chance To Reply
Despite no defendant’s objection to the motion, the judge noted that not all defendants had the chance to reply yet. The order read, “even though Plaintiffs have stated that no Defendant has opposed the consolidation, they have not provided a sworn declaration confirming that they have conferred with Defendants and that none of them are against it.”
Michael Elliott Jessup, Julie Papadakis, Stephen Pierce, Russell Hawkins, and Elliott Lam are bringing a legal suit against former FTX CEO Sam Bankman-Fried and other associated executives. They’re alleging misappropriation of assets and filing the case in California.
However, the judge indicated that it was unnecessary to combine the cases before hearing from the defendants. The court stated that assigning temporary class counsel before consolidation would be inappropriate and that the defendants needed to hear their chance first.
Bankman-Fried Criminal Trial: Postponement May Be Necessary
Lawyers representing Bankman-Fried have recently indicated that the criminal trial scheduled for October might warrant postponement. In a letter released earlier this week, Bankman-Fried’s attorneys stated that they had yet to formally ask for a date change.
However, it may be necessary since they are still awaiting additional evidence. The judge’s refusal to consolidate the cases aligns with the legal principle that defendants should be able to respond to allegations before making any decision.
This means the cases will proceed separately, and the court will decide each case on its own merits. It remains to be seen how the court will rule in this dispute.
But for now, FTX’s customers must wait and see how the judge decides each case. It is important to note that this is not the end of this lawsuit against FTX, as this allegation could still be brought up another time.