According to FTX, that money was fraudulently transferred to Binance by Sam Bankman-Fried.
Bankman-Fried paid for the share buyback using different tokens, according to the lawsuit.
The new management of failed bitcoin (BTC) and cryptocurrency exchange FTX has filed a lawsuit against Binance Holdings Ltd. and its former CEO Changpeng Zhao, seeking to recover nearly $1.8 billion that the exchange claims was fraudulently transferred by Sam Bankman-Fried. The lawsuit was filed on Sunday, Bloomberg reported.
The case focuses in a July 2021 share buyback agreement. According to the legal filing made by the new management of the failed exchange, Binance, Zhao and other executives of the world’s largest cryptocurrency exchange bought stakes in FTX and its subsidiary WRS in two 2019 and 2020, respectively. In 2021, a share buyback agreement was negotiated in which Binance and others involved received $1.76 billion in FTT, BNB and BUSD as part of this deal with Bankman-Friedco-founder of FTX and currently imprisoned.
The filing also suggests that both FTX and its subsidiary company Alameda Research “may have been insolvent from inception and were certainly insolvent on their balance sheet at the beginning of 2021.” This led FTX’s new management to allege that the share repurchase agreement was made fraudulently.
Additionally, FTX accuses CZ of having published a series of tweets which it considers “false, misleading and fraudulent”, just before the FTX collapse. Specifically, on November 6, 2022, CZ tweeted that he would be selling FTT tokens, triggering a massive wave of withdrawals from the exchange.
Responding to the lawsuit, Binance stated this Monday that the accusations “They have no merit and we will defend ourselves vigorously.”
Alameda Research also sues
On the other hand, Alameda Research, sister of FTX, presented his own lawsuit against Aleksandr Ivanov, the founder of Waves, and his associated entities. They seek to recover at least USD 90 millionarguing the rotation of assets belonging to both them and the debtors in the FTX bankruptcy case.
In March 2022, Alameda deposited approximately $80 million in the stablecoins USD Tether (USDT) and USD Coin (USDC) on Vires.Finance, a liquidity platform operating on the Waves blockchain. These funds had been converted into around USD 90 million in Neutrino USD (USDN)according to the presentation.
The platform incentivized users to deposit their assets to earn rewards and interest, as well as governance rights in the Vires decentralized autonomous organization (DAO). However, Alameda alleges that Ivanov manipulated the value of the WAVES cryptocurrency and diverted funds de Vires covertly.
Alameda has repeatedly attempted to recover these assets, achieving only brief communication with Ivanov in January 2023, who has since ignored all subsequent efforts, the plaintiffs allege.
In recent days, FTX’s assets has filed more than 20 lawsuits against various entities in an effort to recover funds for creditors. Among the notable people involved are Anthony Scaramucci, CEO of SkyBridge Capital and former Trump administration official, Storybook Brawl developers Jean Chalopin, president of Deltec Bank; in addition to Binance and Changpeng Zhao.
This article was created using artificial intelligence and edited by a human Editor.