Crypto Exchange FTX Takes Aim at Binance in Multi-Billion Dollar Lawsuit
The estate of defunct cryptocurrency exchange FTX has launched a lawsuit against Binance and its former CEO Changpeng Zhao, seeking to recover a staggering $1.76 billion. The lawsuit, filed in a Delaware court, alleges that a 2021 share deal between FTX and Binance was fraudulent and constitutes a “constructive fraudulent transfer.”
A Complex Web of Transactions
At the center of the controversy is a 2021 transaction in which Binance, Zhao, and other investors sold a 20% stake in FTX and an 18.4% stake in its U.S.-based entity West Realm Shires back to the company. FTX claims that the share repurchase was funded by its Alameda Research division using a combination of FTX’s and Binance’s exchange tokens, as well as Binance’s dollar-pegged stablecoin.
Insolvency Allegations
The lawsuit alleges that Alameda was insolvent at the time of the share repurchase and could not afford to fund the transaction. FTX co-founder Sam Bankman-Fried, who is currently serving a 25-year sentence for fraud linked to the downfall of his exchange, agreed to the deal, which FTX now claims was fraudulent.
Escalating Tensions in the Crypto World
The lawsuit marks the latest development in the ongoing saga between two of the biggest names in crypto. The collapse of FTX sent shockwaves through the market, and this lawsuit is likely to further exacerbate tensions between the two companies.
What’s Next?
As the legal battle unfolds, one thing is clear: the stakes are high. With billions of dollars on the line, the outcome of this lawsuit will have significant implications for the crypto industry as a whole. Stay tuned for further updates as this story continues to develop.
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