FTX filed a lawsuit against Binance Holdings and its former CEO Changpeng Zhao, trying to withdraw nearly US$1.8 billion (approximately Rs 15.189 crore), claiming it was fraudulently transferred by Sam Bankman-Fried.
Binance, Zhao and other Binance executives received funding as part of a share buyback agreement with FTX co-founder Bankman Fried in July 2021. Under the legal application of FTX Estate, they sold about 20% of their shares in FTX’s international units, with a 18.4% stake in its U.S.-based entity.
According to the filing, Bankman paid stock buybacks with a mix of FTX’s exchange tokens FTT and Binance-branded coins BNB and BUSD.
FTX and its sister trading room Alameda Research “maybe insolvent has been insolvent since its establishment, and by the beginning of 2021 it must have been insolvent.” As a result, the stock repurchase transaction is fraudulent.
FTX also accused Zhao of posting a series of “false, misleading and fraudulent tweets” that shortly after, FTX crashed out of the way “malicious calculations to destroy his competitors.” Zhao’s tweet on November 6, 2022 said Binance intends to sell its FTT tokens, which was worth about US$529 million (approximately Rs 4464 crore), causing a soaring exit from the exchange.
“These claims are unfavorable and we will defend ourselves,” a Binance spokesman said in a statement Monday. Zhao’s representative did not immediately respond to an email request for comment,
The lawsuit is one of many lawsuits filed by FTX against its former investors, branches and clients in Delaware Bankruptcy Court. Other defendants include former White House communications officer Anthony Scaramucci, digital asset exchange Crypto.com and political groups such as Mark Zuckerberg-fighted Fwd.us, court documents show.
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