[ad_1]
The FTX bankruptcy estate continues to pursue litigation
against cryptocurrency firms amid its bankruptcy proceedings. In a new lawsuit,
a group of companies involved in the FTX case filed a complaint against
Binance, seeking to recover $1.8 billion. The complaint was filed on November
10.
FTX Alleges Fraudulent Transfer
According to the filing, the plaintiffs argue that Binance,
former CEO Changpeng Zhao, and other executives at the exchange received at
least $1.76 billion in a fraudulent transfer from FTX. This transfer occurred
through Binance’s 2021 stock repurchase agreement with Sam Bankman-Fried,
co-founder of FTX, who is currently serving a 25-year prison sentence.
The transaction in question saw Bankman-Fried sell
approximately 20% of FTX International and 18.4% of West Realm Shires Services,
also known as FTX US, to Binance.
Bankman-Fried financed the buyback with FTX’s
native cryptocurrency, FTT, alongside Binance-operated tokens BNB and BUSD,
which held a combined value of $1.76 billion at the time of transfer.
FTX filed a $1.76 bn lawsuit against BinanceNov 21: Binance acquired 20% stake in FTX in Nov 2019 for $18.3mJul 21: FTX bought back stake which was a constructive fraudulent transfer as FTX was insolvent pic.twitter.com/SPpRSAYKl9
— Sunil (FTX Creditor Champion) (@sunil_trades) November 11, 2024
The FTX estate alleges in the complaint that both FTX and
its sister company Alameda Research “may have been insolvent from inception,”
with balance-sheet insolvency established by early 2021. Given the alleged
insolvency, the estate claims the stock repurchase constitutes a fraudulent
transaction.
This article was written by Tareq Sikder at www.financemagnates.com.
[ad_2]
Source link
