FTX, the collapsed cryptocurrency exchange, is pushing forward with efforts to recover funds from former business partners.
In its latest legal move, the company—founded by Sam Bankman-Fried (SBF)—has filed a lawsuit against Binance and its former CEO, Changpeng Zhao (CZ). The lawsuit seeks to retrieve $1.8 billion, alleging this amount was fraudulently transferred from FTX by SBF.
The filing claims that, in July 2021, SBF transferred $1.76 billion in FTX’s FTT, Binance’s BNB, and BUSD tokens to Binance, CZ, and other Binance executives. In exchange, Binance sold off about 20% of its stake in FTX’s international unit and 18% in its U.S. entity. The lawsuit further alleges that FTX and its trading arm, Alameda Research, may have been insolvent since their inception and were certainly balance-sheet insolvent by early 2021, rendering the transfer potentially fraudulent.
FTX’s current leadership has also accused CZ of making misleading statements via social media, which they believe worsened the company’s collapse. Notably, CZ announced on November 6, 2022, that Binance would liquidate its FTT holdings, valued at $530 million. Following the announcement, FTX users began mass withdrawals, which rapidly led to the exchange’s downfall.
The latest suit adds to a series of legal actions FTX has initiated since its bankruptcy, aiming to recover funds from previous partners and investors. Recently, FTX settled a case with Bybit, securing a $228 million payout.
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