FTX Sues Binance and Ex 294i4l CEO Zhao, Seeking $1.8 Billion Clawback

FTX also accused Zhao of posting a series of false and misleading tweets. 46146t

By Emily Nicolle, Bloomberg | Updated: 11 November 2024 19:00 IST

FTX Sues Binance and Ex-CEO Zhao, Seeking $1.8 Billion Clawback

Photo Credit: Reuters 3v6d2p

Binance and Zhao received the funds as part of a share repurchase deal with Bankman-Fried

Highlights

FTX crypto exchange collapsed in 2022
FTX founder Sam Bankman-Fried is currently in prison
In 2022 Zhao had said Binance intended to sell its FTT tokens

ment

FTX filed a lawsuit against Binance Holdings and its former Chief Executive Officer Changpeng Zhao, seeking to claw back almost $1.8 billion (roughly Rs. 15,189 crore) it alleges was fraudulently transferred by Sam Bankman-Fried.

FTX co-founder who is now in prison. In that transaction, they sold stakes of about 20 percent in FTX's international unit and 18.4 percent in its US-based entity, according to a legal filing from the FTX estate on Sunday.

Bankman-Fried paid for the stock repurchase using a mix of FTX's exchange token FTT and Binance-branded coins BNB and BUSD valued at $1.76 billion (roughly Rs. 14,852 crore) at the time, according to the filing.

FTX Cleared to Repay Billions to Customers After Bankruptcy Plan Approval

FTX and its sister trading house Alameda Research “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021,” the estate said in the filing. As a result, the share repurchase deal was made fraudulently, it alleged.

FTX also accused Zhao of posting a series of “false, misleading, and fraudulent tweets” shortly before FTX's collapse, the content of which was “maliciously calculated to destroy his rival.” A November 6, 2022 tweet by Zhao stated that Binance intended to sell its FTT tokens, worth some $529 million (roughly Rs. 4,464 crore) at the time, causing withdrawals from the exchange to skyrocket.

“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson said in a statement on Monday. A representative for Zhao didn't immediately reply to an e-mailed request for comment

US CFTC Orders Bankrupt Crypto Exchange FTX to Pay $12.7 Billion to s

The lawsuit is one of many filed by FTX against its former investors, s and clients in the bankruptcy court of Delaware. Other defendants include former White House communications officer Anthony Scaramucci, digital-asset exchange Crypto.com and political groups such as the Mark Zuckerberg-founded FWD.US, according to court documents.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

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