FTX Sues Binance and CZ in Effort to Recover $1.8 Billion
FTX, the once-dominant cryptocurrency exchange that collapsed over two years ago, continues its efforts to recover substantial funds from former investors.
In its latest move, the company, founded by Sam Bankman-Fried, has turned its attention to Binance and its former CEO, Changpeng Zhao.
According to a report from Bloomberg, FTX’s legal team has filed a lawsuit seeking to reclaim $1.8 billion. The lawsuit alleges that Bankman-Fried fraudulently transferred the funds to Binance and its executives, including Zhao, back in July 2021.
Specifically, the lawsuit claims that $1.76 billion was moved in the form of FTT, BNB, and BUSD tokens to Binance and other parties, leading to the sale of 20% of FTX’s international division and over 18% of its US operations.
The filing further asserts that both FTX and its sister trading firm, Alameda Research, were likely insolvent from the start, and certainly were by early 2021, rendering the transfer fraudulent.
In addition to the financial claims, the current leadership of FTX accuses Zhao of spreading false, misleading, and fraudulent statements, which they argue contributed to the exchange’s downfall.
One key moment highlighted in the lawsuit occurred on November 6, 2022, when Zhao announced Binance’s intention to liquidate its entire portfolio of FTT tokens, worth around $530 million at the time. This statement triggered a wave of withdrawals from FTX, and the exchange quickly spiraled into collapse.
Since the company’s collapse, FTX’s new leadership has filed several lawsuits against former partners and investors. Recently, FTX settled a legal dispute with Bybit, securing a $228 million payout.
