Scandalous FTX sued Binance and its former CEO, demanding the return of $1.8 billion

The bankruptcy trustees of the FTX cryptocurrency exchange have filed a lawsuit against the Binance cryptocurrency exchange and its former CEO Changpeng Zhao. The plaintiffs are seeking the return of $1.8 billion that they believe Binance received as a result of a fraudulent transaction with former FTX head Sam Bankman-Fried.

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The report said that Binance, Zhao and some other crypto exchange executives received these funds as part of a 2021 share buyback deal led by Bankman-Fried, then the head of FTX, and now in prison. As part of the deal, Binance and Zhao sold Bankman-Fried stakes of approximately 20% in the international division of FTX and 18.4% in the US division of the company. The plaintiffs note that Bankman-Fried paid for the repurchase of shares using FTX exchange tokens (FTT) and the BNB and BUSD cryptocurrencies for a total amount of $1.76 billion.

The suit said FTX, along with trading subsidiary Alameda Research, “may have been insolvent from the beginning and certainly were insolvent by early 2021.” The plaintiffs are confident that this is one of the proofs that the deal was concluded fraudulently. However, FTX accused Zhao of posting a series of “false, misleading and fraudulent tweets” shortly before FTX’s collapse. The content of these publications, in their opinion, was “maliciously designed to destroy a competitor.”

«The claims are groundless, and we will vigorously defend ourselves,” a Binance representative commented on this issue. Zhao himself and his representatives have not yet commented on this lawsuit. We also note that this lawsuit is not the first filed by FTX against its former investors, affiliates and clients.