Defunt cryptocurrency firm FTX is suing Binance and its former chief Changpeng Zhao, alleging that $1.8 billion was “fraudulently transferred” by FTX administration to Binance and its executives, the small print from a lawsuit revealed.
The lawsuit pertains to Binance’s sale of its stake in Sam Bankman-Fried’s FTX, which it acquired in 2019 however then negotiated to promote again to FTX in July 2021.
According to the lawsuit, FTX’s Alameda Research division straight funded the share repurchase utilizing tokens which had a then honest market worth of $1.76 billion. Alameda, the lawsuit alleges, was bancrupt on the time of shopping for the shares and couldn’t due to this fact afford to fund the transaction and it mustn’t have been allowed to proceed.
“By this lawsuit, the Plaintiffs seek to recover, for the benefit of FTX’s creditors, at least $1.76 billion that was fraudulently transferred to Binance and its executives at the FTX creditors’ expense, as well as compensatory and punitive damages to be determined at trial,” the directors for the FTX property stated in a submitting made on Sunday within the U.S. state of Delaware.
A Binance spokesperson stated: “The claims are meritless, and we will vigorously defend ourselves.”
Zhao, often known as “CZ”, couldn’t instantly be reached for remark.
The lawsuit is the newest battle between FTX and Binance.
FTX was one of many largest cryptocurrency corporations on the planet earlier than it collapsed in late 2022.
Arch-rival Binance, then led by Zhao, was set to come back to its rescue and purchase FTX’s non-U.S. unit because it struggled to remain afloat in November 2022, earlier than Binance withdrew its provide.
FTX founder Bankman-Fried was sentenced in March this 12 months to 25 years in jail for stealing $8 billion from clients. He has appealed the conviction.
Zhao was sentenced to 4 months in jail earlier this 12 months, after pleading responsible to violating U.S. legal guidelines in opposition to cash laundering on the world’s largest cryptocurrency alternate.
Source: www.dailysabah.com