Bloomberg discovered that cryptocurrency exchange FTX is suing Binance, the world’s largest cryptocurrency exchange, and its former CEO Changpeng Zhao to recover $1.8 billion allegedly fraudulently transferred to Binance accounts.
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The plaintiffs allege that Binance received the funds in 2021 through an agreement between former FTX CEO Sam Backman-Fried, Zhao, and Binance.
According to the court filing, as part of the deal, Binance and Zhao sold Backman-Fried about 20% of FTX’s international division and 18.4% of WRS shares, which represented FTX projects in the United States. Binance purchased these assets in 2019 and 2020 for $18.5 million in the form of BNB tokens.
Bankman-Fried paid around $1.76 billion in FTX exchange native tokens (FTT), BNB and BUSD cryptocurrencies for share buybacks.
According to FTX’s interim management, the transaction was fraudulent and indicated that the exchange and its subsidiary Alameda Research were already financially unstable entities in early 2021. The statement of claim calls the transfer of $1.76 billion a “constructive fraudulent transaction.” , notes the newspaper.
Additionally, Zhao was accused of posting “false, fraudulent and misleading” posts on Twitter, which allegedly contributed to FTX’s early collapse. One of these tweets is a post from November 6, 2022, when Zhao announced that his company was selling all of its FTX tokens for $530 million. Shortly after, users began massively withdrawing their funds from the exchange, leading to its collapse.
“The claims are baseless and we will defend ourselves in court with all our efforts,” a Binance representative said in response to the allegations. Zhao declined to comment on FTX’s lawsuit.
Following the collapse of the FTX exchange in 2022 and the 25-year prison sentence of its founder and CEO Sam Bankman-Fried, the company is temporarily run by a special committee of creditors, which makes progressive payments to the exchange’s losing clients in based on your wallet balance at the time of the company’s collapse.
Author:
Mikhail Zelenin
Source: RB

I am a professional journalist and content creator with extensive experience writing for news websites. I currently work as an author at Gadget Onus, where I specialize in covering hot news topics. My written pieces have been published on some of the biggest media outlets around the world, including The Guardian and BBC News.