FTX, the former cryptocurrency exchange that ceased operations over two years ago, is taking legal steps to recover substantial funds from its previous business partners and investors.
FTX Initiates Legal Action Involving Binance and Former CEO Changpeng Zhao
Founded by Sam Bankman-Fried, FTX has filed its latest lawsuit involving Binance and its former CEO, Changpeng Zhao (CZ). According to a Bloomberg report, FTX’s legal representatives are seeking $1.8 billion, which they claim was transferred during prior transactions.
The filing suggests that in July 2021, FTX, led by Bankman-Fried, transferred $1.76 billion in FTT, BNB, and BUSD tokens to Binance and other parties. In exchange for these funds, FTX sold 20% of its international branch and approximately 18% of its U.S. subsidiary.
Legal Questions Surrounding Financial Transactions
According to FTX’s current management, some of these financial transactions may have taken place at a time when FTX and its subsidiary, Alameda Research, were already facing potential financial challenges, which, according to FTX’s attorneys, could impact the validity of these transfers.
Significant Announcement and Subsequent Market Impact
On November 6, 2022, CZ announced Binance’s plans to sell its FTT token holdings. This announcement had a notable impact on the market, leading to increased withdrawals from FTX, which contributed to the challenging circumstances faced by the exchange.
FTX’s Ongoing Legal Strategy
As part of a broader legal strategy to recover funds from former business partners, FTX recently reached a settlement with Bybit, securing $228 million in the process.
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