The Prime Trust estate has secured a $9 million default judgment against Polo Digital Assets LTD, the firm that operates Poloniex and is identified in the report as being owned by Justin Sun. The case stems from an adversary proceeding tied to transfers made before Prime Trust entered bankruptcy. According to the report, Prime Trust had moved more than $9 million to Poloniex and Sun after deciding to end its relationship with Sun-linked entities because an SEC lawsuit against Sun was still active at the time, though that case was later dropped. Prime Trust later entered bankruptcy after what the report describes as deep insolvency tied to failures in safeguarding crypto assets and the use of customer deposits in an attempt to cover the shortfall. The report also notes that Prime Trust used $82 million in customer funds to buy Terra and Ether. For now, the default judgment applies only to Polo Digital Assets LTD, while the estate is still seeking discovery related to Sun personally. The report also says the FTX estate has filed adversary claims against Sun-owned HTX and Poloniex, as well as Sun himself.
The Prime Trust estate has won a $9 million default judgment against Justin Sun-owned Poloniex.
The estate had previously filed an adversary proceeding against Justin Sun and Poloniex over what it described as preferential transfers of property before the Prime Trust bankruptcy. Shortly before filing for bankruptcy, Prime Trust decided to end its relationship with entities associated with Sun, including Poloniex, because the SEC lawsuit against Sun was still ongoing at the time, though that case was later dropped.
That decision led Prime Trust to transfer more than $9 million to Poloniex and Sun.
Prime Trust later entered bankruptcy after falling into deep insolvency. The report says the company failed to adequately custody its cryptocurrency and then used customer deposits in an attempt to cover the shortfall. It also notes that Prime Trust used $82 million in customer funds to buy Terra and Ether.
Judgment currently applies only to Poloniex operating entity
Prime Trust later filed suit to claw back the funds it had transferred to Sun and Poloniex. The default judgment now applies only to Polo Digital Assets LTD, the company that operates Poloniex. The estate is still seeking discovery on Sun personally.
Other Sun-linked entities are also facing adversary actions
Poloniex is not the only Sun-owned entity currently being pursued in adversary proceedings. According to the report, the FTX estate has also filed suit against Sun-owned HTX and Poloniex, as well as Sun himself.
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