FTX, the bankrupt crypto-exchange, has filed a lawsuit against Binance and its former CEO, Changpeng CZ Zhao, seeking 1.8 billion dollars. Essentially, it seems that in July 2021, Binance and its executives allegedly obtained 1.75 billion dollars fraudulently from Sam Bankman-Fried.
FTX and the lawsuit against Binance and CZ for 1.8 billion dollars
The group of companies behind the bankruptcy proceedings of FTX has filed a new lawsuit against Binance and its former CEO, Changpeng CZ Zhao, seeking 1.8 billion dollars.
FTX files a lawsuit against Binance and its former CEO Changpeng Zhao, seeking to claw back almost $1.8 billion it alleges was fraudulently transferred by Sam Bankman-Fried https://t.co/zCAKJzWsRX
— Bloomberg Crypto (@crypto) November 11, 2024
“FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao, seeking to recover nearly 1.8 billion dollars that it claims were fraudulently transferred by Sam Bankman-Fried.”
In practice, it seems that in July 2021, there was a repurchase agreement of 1.75 billion dollars by Sam Bankman-Fried with Binance, which turns out to be a fraudulent transaction.
Specifically, in the complaint, the plaintiffs claim that Binance, CZ, and other executives of the crypto-exchange received the total amount in FTT, BNB, and BUSD tokens. The 1.75 billion dollars were sent by Bankman-Fried for the repurchase of FTX shares.
Here is how the document states:
“[FTX and Alameda Research] may have been insolvent from the beginning and certainly were insolvent from a balance sheet perspective at the start of 2021. Due to the insolvency, the stock buyback operation was a fraudulent transaction.”
FTX and the lawsuit against Binance and CZ: seeking to recover the funds
For some time now, the bankruptcy estate of FTX has been filing lawsuits against crypto companies as part of the ongoing bankruptcy proceedings. The goal is precisely to recover the funds that were lost.
Beyond the present case against Binance and CZ, recently FTX settled another case against Bybit with a settlement.
In fact, at the end of October, Bybit agreed to pay 175 million dollars to FTX in digital assets, currently held in the crypto-exchange and another 53 million through the sale of BIT tokens to Mirana Corp, an investment arm of Bybit.
The lawyers of FTX wanted to emphasize that accepting the settlement, and therefore an out-of-court solution, was advantageous for the plaintiffs to avoid the cost and complexity of the disputes.
25 years in prison for Sam Bankman-Fried and the question of remorse
Exactly 2 years have passed since the official collapse of the crypto-exchange FTX, and slowly with it, the entire empire of Sam Bankman-Fried has collapsed.
In fact, last March, Bankam-Fried, former CEO of FTX, was sentenced to 25 years in prison.
The sentence was issued by a federal judge after the conviction for seven counts of fraud and conspiracy. Not only that, at that time, Bankman-Fried had shown no remorse for the deception carried out.
Only the month after, in April 2024, in an interview with ABC News via email, Bankman-Fried finally declared to feel remorse.