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FTX sues CZ and Binance and asks for $1.8 billion
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Bankrupt exchange FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao, demanding a return of $1.8 billion. According to FTX, Sam Bankman-Fried, former CEO of FTX, sent the funds to FTX illegally.
This legal development has sparked speculation in the broader cryptocurrency market, especially as FTX works to recover funds following its collapse two years ago. Over the past two years, the company has raised nearly $10 billion in recovered funds.
According to a recent Bloomberg report, FTX alleges that SBF sent $1.8 billion to Binance as part of a share buyback agreement in July 2021. In that transaction, the former FTX CEO allegedly used a combination of FTT, BNB and BUSD to repurchase approximately 20% of FTX’s international unit.
The report notes that at the time, the total value of these assets was about $1.76 billion.
In search of the billion
In its lawsuit, FTX alleges that it, along with Alameda Research, may have been financially unstable from the beginning and were likely already insolvent by early 2021. On this basis, the FTX estate argues that the repurchase agreement of shares was fraudulent and must be voided to recover the transferred funds.
Adding to the allegations, he accuses CZ of issuing misleading statements before FTX’s collapse. In November 2022, Zhao tweeted that the exchange intended to sell its holdings in FTT, worth US$529 million.
This announcement triggered mass withdrawals from FTX, leading to a liquidity crisis. According to the lawsuit, these statements were designed to destabilize the exchange, increasing the company’s financial problems.
The case against Binance and CZ is part of FTX’s legal efforts in Delaware bankruptcy court. For context, in another more recent legal action, the company targeted Chinese citizens, alleging their involvement in large-scale money laundering.
According to the report, the exchange alleged that 26 Chinese citizens and 20 other unidentified individuals used the FTX platform to launder billions. The company added that individuals withdrew $468 million in cash and cryptocurrency in a critical 90-day period.
Meanwhile, the case against CZ has also drawn attention as the former CEO of Binance recently made a comment about FTX. Furthermore, it also comes shortly after lawyers filed a request to dismiss Binance’s lawsuit against the United States Securities and Exchange Commission (SEC).
FTX sues CZ and Binance and asks for $1.8 billion
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FTX sues CZ and Binance and asks for $1.8 billion
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FTX sues CZ and Binance and asks for $1.8 billion
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FTX sues CZ and Binance and asks for $1.8 billion
