Originally published on: November 11, 2024
The FTX bankruptcy estate is making headlines once again with a massive $1.8 billion lawsuit against cryptocurrency exchange Binance and its former CEO Changpeng “CZ” Zhao. This latest legal action is part of ongoing proceedings led by a group of firms involved in the FTX bankruptcy case.
According to the complaint filed on Nov. 10, the plaintiffs are seeking to recover $1.8 billion from Binance, alleging that the exchange and its executives received over $1.76 billion worth of cryptocurrency in a fraudulent transfer from FTX.
The fraudulent transaction in question dates back to a July 2021 repurchase deal between FTX co-founder Sam Bankman-Fried, who is currently serving a 25-year prison term. Bankman-Fried reportedly used a mix of FTX Token (FTT) and Binance-operated BNBBNBand Binance USD (BUSD) to pay for the stock repurchase, which was valued at $1.76 billion at the time.
The lawsuit also accuses Binance and CZ of orchestrating a campaign to destroy FTX, alleging that the exchange engaged in a coordinated effort to undermine its rival. This includes a suspected “FUD campaign” against FTX and deliberate actions to harm FTX’s market position while boosting Binance’s.
Furthermore, the FTX estate claims that Binance’s liquidation of FTT before FTX’s collapse in November 2022 was strategically done to maximize market impact and damage FTX, contrary to Zhao’s public statements on the matter.
This lawsuit is just the latest in a series of legal actions by the FTX bankruptcy estate, including a recent complaint against SkyBridge Capital and founder Anthony Scaramucci to recover more than $100 million spent by Bankman-Fried on sponsorship and investment deals.
As the crypto industry continues to evolve, legal battles like these shed light on the complex relationships and power dynamics within the market. Stay tuned for more updates on this developing story. Subscribe to our newsletter for the latest insights on crypto laws and regulations.
