The collapse of FTX has now finally reached South Korea.
Following its bankruptcy filing in the U.S. District Court for Delaware in November 2022, the fallout from the exchange and its affiliate Alameda Research has extended to Dunamu, the operator of Korea’s largest crypto exchange, Upbit. The FTX Recovery Trust, acting as the bankruptcy trustee, has filed a lawsuit against Dunamu seeking the return of $53.4 million (approximately 75 billion KRW) in assets.
What began as a bankruptcy proceeding has now evolved into an international dispute that could shed light on one of the most puzzling remarks made by FTX founder Sam Bankman-Fried (SBF)—his claim that he was “managing $8 billion through Korean friends.”
■ The “Yang Jae-sung” Account: 53.4 Million Dollars Hidden in Plain Sight
At the heart of the case lies an Upbit account registered under the name “Yang Jae-sung.”
According to the trustee, while the account was nominally opened under a private individual, it was in fact managed by Alameda Research as part of its internal liquidity operations. Evidence submitted to the U.S. Bankruptcy Court includes internal Slack messages, email logs, and transaction records showing that the account was referred to as “Alameda Korean Wallet” and “Our Korean Account.”
Between September 2021 and October 2022, multiple transfers of Bitcoin, Ethereum, Ripple, and Solana were made from Alameda’s on-chain wallets to the Upbit account. An internal balance sheet dated October 25, 2022 lists “Yang Jae-sung Account – 53.4M USD,” explicitly identifying the funds as part of Alameda’s managed assets.
Based on these findings, the trustee invoked Sections 542(a) (turnover of estate property) and 362(a) (automatic stay) of the U.S. Bankruptcy Code, arguing that “the funds belong to the bankruptcy estate and must be returned immediately.”
■ Dunamu’s Response: “Individual Account — No Legal Grounds for Return”
Dunamu, however, maintains that it bears no legal responsibility.
The company argues that since the account was opened by a private individual, it cannot transfer assets to a third party without notarized proof of ownership. Dunamu repeatedly told FTX that “we required notarized proof of ownership,” rejecting several requests for withdrawal or transfer.
The FTX trustee counters that “the ownership is already proven through internal correspondence, automatic forwarding settings, and blockchain logs.” With neither side willing to compromise, the lawsuit was formally filed in November 2024.
■ Clues to the “Korean Friend” and the $8 Billion Enigma
The case gained global attention due to its possible link to SBF’s 2022 statement that he was “managing $8 billion through Korean friends.” At the time, the remark was dismissed as an exaggeration. However, with the revelation of the Yang Jae-sung account, the connection now appears more plausible.
Court testimony revealed that FTX insiders referred to the account as the “Weird Korean Account.”
Former FTX executive Nishad Singh testified that “our Korean friend’s email address was seoyuncharles88@gmail.com,” the same address associated with the Yang account. The evidence has fueled speculation that Yang may indeed be the mysterious “Korean friend,” though his true identity remains unverified. Both FTX and Dunamu have declined to comment on the individual.
■ Crypto or Cash? Asset Form Could Multiply the Claim Value
Another key issue is the form of the assets.
The trustee insists that the holdings remained largely in cryptocurrency—about 70% in Bitcoin, 25% in Ethereum, and the rest in smaller altcoins. Others speculate that some assets may have already been converted to Korean won prior to FTX’s collapse.
If the funds were still held in crypto, the appreciation since November 2022 has been dramatic: Bitcoin has risen from $17,700 to around $110,000, roughly a sixfold increase. In that case, the account’s current valuation could exceed hundreds of millions of dollars, significantly expanding Dunamu’s financial exposure in the ongoing litigation.
■ Omission from Financial Disclosure Raises Transparency Questions
The controversy has deepened as it was revealed that Dunamu did not disclose the lawsuit in its recent regulatory filings.
In its semiannual report filed in August, Dunamu listed eight lawsuits totaling 1 billion KRW, with no mention of the FTX case—despite the latter being nearly 75 times larger in scale. Analysts argue that such an omission raises serious transparency and governance concerns for one of Korea’s most prominent tech-finance companies.
The timing is also sensitive: Dunamu is currently pursuing a merger with Naver Financial, a subsidiary of internet conglomerate Naver. Dunamu’s total assets (15.3 trillion KRW) are nearly four times greater than Naver Financial’s (3.9 trillion KRW). If the FTX lawsuit was not fully accounted for during due diligence, it could materially affect the terms and valuation of the merger.
■ FIU Investigation Adds Regulatory Weight
Meanwhile, Korea’s Financial Intelligence Unit (FIU) has launched an investigation into potential anti–money laundering (AML) violations related to Upbit accounts. The FTX trustee claims that the FIU’s review includes accounts associated with “unverified entities,” possibly including the Yang Jae-sung account.
According to the trustee’s submission, Upbit allegedly engaged in over 45,000 transactions with unregistered overseas entities, which could constitute breaches of Korea’s Financial Real Name Act and AML regulations if proven true.
■ A Test Case for Korea’s Crypto Governance
Legal experts say the case could become a landmark precedent defining how Korean exchanges handle foreign bankruptcy claims.
“If the U.S. court rules in favor of the FTX trustee, Korean exchanges may face stronger international compliance obligations under cross-border bankruptcy laws,” said one Seoul-based financial attorney. “If Dunamu wins, it will reaffirm the primacy of Korea’s real-name account system and its legal independence from U.S. insolvency jurisdiction.”
Currently, the Delaware Bankruptcy Court is handling over 40 FTX-related lawsuits, about 30 of which involve asset recovery. The Dunamu case is the first major action targeting an Asian exchange, making its outcome particularly significant.
Ultimately, this is no longer a dispute over a single account—it is a confrontation at the crossroads of global bankruptcy law, Korea’s financial regulations, and the evolving governance of digital assets. The question now is whether Dunamu can provide full transparency and whether Korean regulators can set a clear standard that balances sovereignty with global accountability.
The credibility of Korea’s crypto industry now hinges on how this case is resolved.
