FTX Sues Binance and CZ for $1.8B in Alleged Asset Misuse

Highlights:

• FTX is pursuing $1.8 billion from Binance and CZ, alleging that Sam Bankman-Fried improperly transferred assets.  
• FTX has expanded legal actions against executives and affiliates to recover funds for impacted creditors.  
• Alameda Research also filed suit against Waves’ founder Ivanov, seeking $90 million allegedly misappropriated.

FTX is suing Binance and its ex-CEO Changpeng Zhao for nearly $1.8 billion in transferred funds. According to the bankrupt cryptocurrency exchange, former CEO Sam Bankman-Fried fraudulently transferred these funds. FTX filed the lawsuit on Sunday and it is meant to recover assets that it owes to creditors.

FTX sues Binance and ex-CEO Changpeng Zhao (CZ), seeking $1.8 billion. pic.twitter.com/LzvxgzFYx1

— cryptothedoggy (@cryptothedoggy) November 11, 2024

The filing claims the funds went to Binance and CZ as part of a share repurchase deal with Bankman-Fried in July 2021. Binance sold shares in FTX’s international and U.S.-based units in this transaction. 

These shares were purchased by Bankman-Fried using the native coin of FTX called FTT. He also used BNB and BUSD. The filing argues that this asset transfer was fraudulent because Bankman-Fried should have used the funds to secure FTX’s creditors in case of bankruptcy.

Attorneys for the FTX estate argue that FTX was insolvent when Binance and Zhao received assets. The deal, they argue, harmed FTX’s creditors by making less money available. This is one of many legal fights that FTX has undertaken to return assets to FTX’s creditors after the exchange’s collapse.

Key Executives Targeted in the Campaign

Several of the FTX estate’s lawsuits target major cryptocurrency firms and executives. FTX seeks to retrieve funds that were allegedly moved under questionable circumstances. These legal actions are a critical part of the estate’s plan to repay creditors.

Former White House official and CEO of SkyBridge Capital Anthony Scaramucci is facing legal action. FTX reportedly sued him alongside other prominent players in the crypto space.

FTX’s bankruptcy team wants over $100M back from SkyBridge Capital & Anthony Scaramucci to

This will recoup funds SBF poured into sponsorships and investments before FTX’s collapse. 💸

It all started with a $12M SALT conference sponsorship in early 2022, then a $10M… pic.twitter.com/UFd2d0BYp3

— Professor Crypto (@profcryptotalks) November 10, 2024

The lawsuit claims that FTX used some funds for influence-buying campaigns. According to FTX, Bankman-Fried designed these campaigns to boost FTX’s reputation. Other targets include the digital-asset exchange Crypto.com and political groups like FWD.us, which is backed by tech industry leaders.

FTX’s legal filings suggest that Bankman-Fried improperly diverted these funds. The estate claims that funds went toward projects and partnerships that served Bankman-Fried’s interests. FTX’s lawsuits aim to recover these assets, which they argue should belong to FTX’s creditors.

Alameda Sues Waves Founder Ivanov for $90 Million

Alameda Research recently sued Aleksandr Ivanov. Ivanov is the founder of the Waves blockchain platform. Alameda seeks to recover approximately $90 million it claims was misappropriated by Ivanov through the Vires Finance platform.

Alameda Research Sues Waves Founder for $90 Million | @CONTENT_EDMedia#crypto #cryptocurrency #cryptonews #ftx #waveshttps://t.co/IuhLAsEae3

— FullyCrypto (@FullyCrypto) November 11, 2024

Alameda’s lawsuit alleges that Ivanov misled users of Vires Finance. Alameda accuses Ivanov of artificially inflating WAVES token values to siphon funds. The lawsuit alleges that Ivanov promoted Vires as a profit-making opportunity.

Vires Finance platform operates on the Waves blockchain where users can deposit assets and make rewards. It argues that stablecoins were first deposited on the platform before being converted into USDN, a Waves-native stablecoin. Alameda alleges that Ivanov inflated the deposited funds to $90 million during the conversion. Alameda contends that, since January 2023, Ivanov has limited its access to funds and cut off communication.