Fallen crypto exchange FTX is suing Binance and its former CEO over an allegedly fraudulent transfer.
FTX is suing Binance and its former chief executive officer Changpeng Zhao – also known as «CZ» – for allegedly fraudulently transferring $1.8 billion, according to a filing made in the US state of Delaware.
The lawsuit relates to Binance’s sale of its FTX stake in July 2021, which was acquired in 2019. According to the lawsuit, FTX's Alameda Research division funded the deal using tokens that had a fair market value of $1.76 billion. However, the division was allegedly insolvent at the time so, therefore, the transaction should not have been allowed to proceed.
«By this lawsuit, the Plaintiffs seek to recover, for the benefit of FTX’s creditors, at least $1.76 billion that was fraudulently transferred to Binance and its executives at the FTX creditors’ expense, as well as compensatory and punitive damages to be determined at trial,» administrators for the FTX estate said.
Defendant’s Response
In response, a Binance spokesperson said that «the claims are meritless, and we will vigorously defend ourselves».
FTX founder Sam Bankman-Fried was sentenced to 25 years in prison in March for stealing $8 billion from customers. One month later, Zhao was sentenced to four months in prison after pleading guilty to violating US money laundering laws.
