Defendants File Reply Challenging Jurisdiction in FTX Bankruptcy Adversary Proceeding
On Wednesday, May 8, 2024, a response was filed in bankruptcy court in Delaware related to a dispute over cryptocurrency transactions.
FTX Trading Ltd. and two related companies filed an adversary proceeding against eight individuals and entities. The complaint alleged preferential transfers involving digital assets and fiat currency from FTX.com, the international arm of the failed cryptocurrency exchange, in the months before it declared bankruptcy in November 2022.
Four of the individual defendants—Singapore residents Sean Tan, Germaine Tan, Weizheng Ye, and Nashon Loo—filed a motion to dismiss the claims against them for lack of jurisdiction. They argued that as foreign individuals, the court did not have jurisdiction over them.
In their reply filed on May 8, the defendants maintained that the plaintiffs failed to establish grounds for jurisdiction. They pointed out the evidence showed transactions cited only involved exchanges between FTX.com accounts and did not connect the defendants to the United States. The defendants noted that routine use of a U.S. bank to process international dollar transfers was not enough on its own to assert jurisdiction.
Regarding two defendants in particular, the reply asserted that Germaine Tan had no contact with the U.S. related to the claims and should be dismissed entirely. It was also argued that most of the preferential transfer claims against Nashon Loo similarly lacked a jurisdictional basis.
The defendants further contended that requiring foreigners to litigate such claims in a U.S. court thousands of miles from their homes would be unreasonable. They requested the motion be granted in full or at minimum to narrow the scope of claims.
A hearing on the motion to dismiss has not yet been scheduled, as the bankruptcy proceedings involving FTX Trading and associated companies continue in Delaware court.
Please contact BlockTribune for access to a copy of this filing.
