FTX has filed a $1.8 billion lawsuit against Binance and its former CEO Changpeng Zhao, accusing them of fraudulent fund transfers.
Background of the Share Deal
FTX accuses Binance and Changpeng Zhao of receiving $1.76 billion in FTX tokens (FTT) and Binance coins (BNB and BUSD) as part of a July 2021 share repurchase deal. FTX claims that the funds used for the buyout were allegedly from FTX customers and investors. According to FTX, both FTX and Alameda Research were insolvent before this deal, making the transaction a "fraudulent transfer."
Allegations Against Changpeng Zhao
FTX alleges that Changpeng Zhao's actions were part of a broader scheme to destabilize FTX. One of the lawsuit's focal points is Zhao's November 6, 2022, tweet, where he announced Binance's intention to sell its FTT holdings, leading to mass withdrawals and a liquidity crisis at FTX. FTX claims that Zhao's statement was made to undermine the exchange's reputation and drive users away.
Lawsuits Against Other Companies
Besides the lawsuit against Binance, FTX's estate is filing claims against other figures and companies in the crypto industry, including former White House communications director Anthony Scaramucci, cryptocurrency exchange Crypto.com, and the advocacy group FWD.us, founded by Mark Zuckerberg. Additionally, FTX's sister company, Alameda Research, filed a separate lawsuit against Alexander Ivanov, the founder of the Waves blockchain platform, seeking to recover $90 million allegedly linked to Vires.Finance.
The lawsuits filed against Binance and others underscore FTX's efforts to recover funds and highlight potential misconduct in dealings during the financial crisis.
