🌋 FTX Files Lawsuit Against Binance and Former CEO Changpeng Zhao
posted 11 Nov 2024
FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao, seeking to recover $1.8 billion in assets, which the exchange claims were improperly transferred by Sam Bankman-Fried three years ago.
In the summer of 2021, Zhao and other Binance executives participated in a buyback of shares from FTX. As part of this transaction, they sold approximately 20% of their shares in FTX’s international division and 18.4% in its U.S. branch. These details were shared by FTX in a statement issued on November 10, 2024.
Excerpt from FTX’s Complaint Against Binance. Source: kroll.com
According to the filing, Sam Bankman-Fried used FTX’s native token, FTT, as well as BNB (the Binance Smart Chain token) and the stablecoin BUSD, to purchase the shares. At the time, the combined value of these assets was approximately $1.76 billion.
Given that both FTX and its affiliated firm, Alameda Research, were already insolvent when this transaction took place, FTX representatives have labeled the buyback as fraudulent.
The exchange also accuses Zhao of posting tweets that created FUD just days before FTX’s collapse. FTX’s representatives argue that these posts were intended to weaken the competition.
For instance, in a post dated November 6, 2022, Zhao stated that Binance intended to sell its FTT holdings, valued at $529 million. This announcement led to a significant outflow of funds from FTX.
This lawsuit is just one among several FTX has filed against its former investors, partners, and clients. Other defendants include former White House communications officer Anthony Scaramucci, the exchange Crypto.com, and political organizations, such as FWD.US, founded by Mark Zuckerberg.
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