In a surprising turn of events, FTX has taken Binance and its former CEO to court for alleged fraudulent transfer of money.
According to Bloomberg, FTX sued Binance Holdings Ltd. and Changpeng Zhao, the company’s former CEO, in an attempt to recover nearly $1.8 billion that it claims Sam Bankman-Fried fraudulently transferred.
FTX Sues Binance and CZ: What is Happening?
As part of a July 2021 share repurchase agreement with Bankman-Fried, the now-incarcerated co-founder of FTX, Binance, Zhao, and other Binance executives received the money. In that transaction, they sold approximately 20% of FTX’s international unit and 18.4% of its US-based entity.
Targeting Zhao and Binance in order to obtain monetary damages has emerged as one of the most notable actions during the bankruptcy process, according to Bloomberg.
According to the lawsuit, Binance tried to pull its resources while FTX was having financial difficulties, which further weakened FTX’s position.
FTX Binance Lawsuit Comes As Crypto Exchange Tries To Recover Money
The FTX bankruptcy team has brought more than 20 lawsuits against different businesses and influential people in addition to the one against Binance and Zhao. FTX hopes to raise money through these lawsuits to compensate creditors for their losses during the bankruptcy process.
Singing the same tone, the trading arm of the defunct cryptocurrency exchange FTX, Alameda Research has filed serious lawsuits against Waves blockchain platform founder Aleksandr Ivanov and its affiliated companies.
The lawsuit was filed on Sunday, November 10th and aims to recover assets owned by debtors in the intricate bankruptcy cases of FTX and Alameda, totaling at least US$90 million.
This legal action, which focuses on assets that were previously deployed on the Waves ecosystem through its Vires.Finance platform, is another significant step in the ongoing effort to recover funds following the spectacular collapse of the FTX empire.
When FTX crashed in November 2022, the market was in disarray and the value of cryptocurrencies was declining. At the time, advisors projected that creditors would only receive a small percentage of their money back.
The crash had also created doubts in the minds of many on the credibility and sustainability of crypto markets.
Nevertheless, during the bankruptcy process, FTX’s circumstances improved. As of June 2024, the company’s assets were valued at $12.6 billion. However, after all assets are sold, that figure could rise to $16.5 billion. Among the assets sold are venture capital projects, such as FTX’s investment in the AI startup Anthropic.