The defunct cryptocurrency exchange FTX is filing a lawsuit against Binance and its former CEO Changpeng Zhao over events in 2021 and 2022. This was a legal matter that was a matter of time before it happened. Now, the board of the bankrupt platform is ready to recover some of its funds.
According to Bloomberg , the company is seeking to recover around $1.8 billion it sent to Binance in July 2021. This transaction followed a stock buyback agreement with Sam Bankman-Fried, FTX’s then-CEO, who is now serving a sentence. The aforementioned transaction involved sales of approximately 20% of the stake in FTX’s international unit and 18.4% of its US-based entity.
According to the lawsuit documents cited by Bloomberg, FTX paid Binance in FTT tokens, BNB, and the BUSD stablecoin. At the time, the payment amount was approximately $1.7 billion. The board stresses that FTX was likely already insolvent by early 2021, making the aforementioned transfer to Binance fraudulent.
Basically, FTX's lawsuit against Binance is seen by the community as a kind of revenge for the events of 2022. From FTX's point of view, this is a way to capitalize on it, since the lawsuits for fraudulent transfers do not only affect Binance and CZ. Anthony Scaramucci, among others, was also sued for receiving fraudulent funds.
FTX sues former Binance CEO for malicious messages
On the other hand, the exchange's management includes another accusation against Binance, particularly its then CEO, CZ. This is due to the businessman's malicious messages in 2022, which caused the final collapse of FTX. On his account on X, Zhao stated just before the fall of his rival that Binance intended to sell its FTT tokens valued at more than $520 million.
The latter led not only to massive sales of the FTT token, but also to withdrawals of funds from an exchange that had no way of repaying them. Thus, CZ was fully aware of FTX's situation and his posts were therefore maliciously intended to harm his rival, according to the current FTX management.
These " false, misleading and fraudulent " messages are therefore subject to a lawsuit, since they were " maliciously calculated to destroy a rival ."
It is important to remember that before the collapse, FTX was one of the most popular cryptocurrency exchanges in the world. In fact, it once ranked second in trading volume behind Binance. Hence, Changpeng Zhao's then irreverent firm did not hide its intentions to take a direct rival out of the game.
In any case, the bankruptcy of FTX cannot be blamed on Binance, but rather on the mismanagement of its directors. The collapse of that exchange was the cause of the severe winter of 2022, when cryptocurrency prices plummeted. In addition, the side effects were terrible and still affect the industry to a large extent, as is the case with the hostility of the SEC.
