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In the latest development in the FTX bankruptcy case, the collapsed entity has launched a lawsuit against cryptocurrency exchange Binance (CRYPTO: BNB), aiming to reclaim $1.8 billion.
What Happened: The plaintiffs in the case are alleging that Binance, its ex-CEO Changpeng "CZ" Zhao, and other top executives received a minimum of $1.76 billion in cryptocurrencies through a fraudulent transfer from FTX, a Cointelegraph report revealed on Monday.
The controversial transaction is associated with Binance's repurchase agreement with Sam Bankman-Fried (SBF), the FTX co-founder who is currently serving a 25-year prison sentence. The plaintiffs claim that Bankman-Fried unlawfully sold stakes of approximately 20% in FTX's international and 18.4% in its U.S.-based entity, West Realm Shires Services, doing business as FTX US.
SBF paid for the deal using a mix of cryptocurrencies, including the FTX token (CRYPTO: FTT), BNB, and stablecoin Binance USD (CRYPTO: BUSD).
A Binance spokesperson told Benzinga that the claims by FTX were meritless and they would “vigorously” defend themselves. FTX did not immediately respond to Benzinga's request for comment.
Why It Matters: This lawsuit was a part of the ongoing bankruptcy proceedings of FTX, with the estate persistently filing lawsuits against cryptocurrency firms.
FTX filed a lawsuit against former White House communications director Anthony Scaramucci and his hedge fund SkyBridge Capital as part of its efforts to gather money for the creditors of the now-bankrupt cryptocurrency exchange.
Last month, a U.S. bankruptcy judge approved FTX's plan to repay creditors up to $16.5 billion, with 98% of creditors to receive full repayment plus compensation.
FTX, once a leading player in the cryptocurrency exchange market, collapsed in 2022 following accusations of misappropriation of customer accounts, illegal political donations, and luxury Caribbean real estate purchases by SBF and his accomplices.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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