FTX Seeks $1.8 Billion from Binance in Legal Pursuits Against 23 Firms

The bankrupt cryptocurrency exchange FTX has recently filed 23 lawsuits in Delaware’s bankruptcy court against various companies and individuals to recover funds for creditors, reports Bloomberg.

Binance

In the lawsuit against Binance Holdings Ltd. and its founder Changpeng Zhao (CZ), FTX’s lawyers demand the return of $1.8 billion paid during a stock buyback in 2021.

The plaintiffs claim that during the transaction, Binance executives sold about a 20% stake in FTX’s parent company and 18.4% in its American subsidiary. Then-CEO Sam Bankman-Fried paid for the buyback with FTT, BNB, and BUSD tokens totaling $1.76 billion, they added.

The lawyers believe that at the time of the transaction, FTX and its affiliate Alameda Research “may have been insolvent from the start and were certainly balance sheet insolvent by early 2021.” As a result, they consider the stock buyback to have been conducted fraudulently.

Simultaneously, FTX also accused CZ of publishing a series of “false, misleading, and fraudulent tweets” shortly before the exchange’s collapse, which were “maliciously calculated to destroy his competitor.” Specifically, this referred to Zhao’s tweet about plans to sell his FTT tokens, worth about $529 million at the time, which led to a sharp withdrawal of funds from the exchange.

In a media comment, a Binance representative called the claims “baseless” and announced readiness to “vigorously defend” against them. 

Waves

Alameda Research is suing Waves founder Alexander Ivanov in an attempt to recover $90 million previously deposited on the liquidity platform Vires.Finance.

According to the lawsuit, in March 2022, Alameda deposited ~$80 million in USDT and USDC, which were later converted into USDN amounting to ~$90 million. 

“While Ivanov promoted Waves and Vires as opportunities for creditors and other users to earn significant profits, he secretly arranged a series of transactions that artificially inflated the value of WAVES while withdrawing funds from Vires,” claim Alameda Research.

They added that despite numerous attempts by debtors to reclaim their frozen assets, Ivanov “agreed to join only one conversation with them in January 2023” and subsequently ignored such requests.

Scaramucci and Others

FTX also intends to recover over $100 million from SkyBridge Capital CEO Anthony Scaramucci as compensation for damages. According to the lawyers, investments in his projects brought the exchange “virtually no benefit.”

In 2022, Bankman-Fried invested $67 million in SkyBridge, but the company’s assets under management fell from a peak of $9 billion in 2015 to $2.2 billion. 

Among other notable defendants in the FTX/Alameda Research lawsuits are the exchange Crypto.com, developers of the game Storybook Brawl, Deltec Bank chairman Jean Chalopin, and political groups such as FWD.US, founded by Mark Zuckerberg.

Back in late October, FTX withdrew its lawsuit against Bybit as part of a $228 million settlement agreement.

Earlier, a U.S. bankruptcy court approved a reorganization plan for the bankrupt exchange to settle debts with creditors.

The initiative was supported by 94.48% of FTX clients with claims on assets worth $6.83 billion. About 98% of creditors will receive at least 118% of their claims in fiat at the rate at the time of the bankruptcy filing.