The FTX saga continues to unfold with a new twist, as the bankrupt cryptocurrency exchange has launched a lawsuit against Binance, the world’s largest crypto exchange, seeking to reclaim a staggering $1.8 billion.
At the heart of the lawsuit are accusations of a fraudulent transfer of cryptocurrencies. The plaintiffs allege that Binance, its former CEO Changpeng “CZ” Zhao, and other key executives received a minimum of $1.76 billion in digital assets through illicit transactions. The controversial transfer is linked to Binance’s repurchase agreement with Sam Bankman-Fried (SBF), the disgraced FTX co-founder currently serving a 25-year prison sentence.
The lawsuit claims that Bankman-Fried illegally sold significant stakes in FTX, including a 20% stake in its international operations and an 18.4% stake in its U.S. entity, West Realm Shires Services, known as FTX US. To finance this deal, Bankman-Fried allegedly used a mix of cryptocurrencies, including the FTX token (FTT), BNB, and the stablecoin Binance USD (BUSD).
This lawsuit is part of a broader pattern in the ongoing bankruptcy proceedings of FTX, where the estate has been aggressively pursuing legal action against various cryptocurrency firms. In a previous case, FTX filed a lawsuit against former White House communications director Anthony Scaramucci and his hedge fund SkyBridge Capital.
FTX’s efforts to recover funds for creditors seem to be paying off. Last month, a U.S. bankruptcy judge approved a plan for FTX to repay its creditors up to $16.5 billion. This plan includes full repayment plus compensation for 98% of creditors.
The FTX collapse in 2022 sent shockwaves through the cryptocurrency world, exposing alleged misconduct that included misappropriation of customer funds, illegal political donations, and lavish spending on luxury properties. The lawsuit against Binance is another chapter in the complex and ongoing saga of FTX’s downfall.
While Binance has not commented on the lawsuit, this development highlights the evolving landscape of the cryptocurrency industry and the ongoing legal battles that are reshaping its future.
