Outside Source
Though Brian Pellegrino said in September 2023 that FTX’s lawsuit was “filled with unsubstantiated claims,” LayerZero reached an agreement over deals with the company.
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Bryan Pellegrino, co-founder and CEO of crosschain protocol LayerZero Labs, said the firm reached an agreement with FTX involving transactions in 2022 with Alameda Research’s venture capital arm, Alameda Ventures.
In a Jan. 31 X post, Pellegrino said after “millions in legal fees” and two years in litigation, LayerZero had settled with the FTX estate over funds the platform allegedly withdrew before the crypto exchange’s collapse in November 2022 and an agreement over an equity stake in the crosschain protocol. FTX had sought more than $21 million from LayerZero as part of the lawsuit.
“Ultimately we decided this was not us vs FTX which is a fight we feel completely justified in, but it was us vs the creditors (which also we are one of),” said the LayerZero CEO. “Original repurchase has been returned to the estate.”
Jan. 31 X post announcing LayerZero-FTX settlement. Source: Bryan Pellegrino
In 2022, Alameda Ventures agreed to purchase a roughly 5% stake in LayerZero. Transaction records showed Alameda sent $70 million to LayerZero and bought $25 million worth of STG tokens.
When FTX and many of its sister companies and subsidiaries filed for bankruptcy in November 2022, many companies were left scrambling with deals in place and funds expected to be moved.
LayerZero sought to buy back its equity in exchange for forgiving a $45-million loan to FTX. The exchange’s estate filed a lawsuit in September 2023, alleging that LayerZero “negotiated a fire-sale transaction” with then-Alameda CEO Caroline Ellison, taking advantage of the firm during a liquidity crisis.
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Court filings showed LayerZero also planned to purchase the STG tokens back for $10 million in a separate deal — roughly 40% of their original price. However, Alameda never transferred the tokens, and no funds were sent from LayerZero.
The fallout of FTX’s collapse
Since declaring bankruptcy in 2022, FTX debtors have filed several lawsuits against crypto companies with ties to the now-defunct exchange seeking to recover funds. Though some cases were ongoing at the time of publication, the estate’s reorganization plan officially took effect on Jan. 3, allowing many users with claims under $50,000 to be repaid within 60 days.
All criminal cases against the exchange’s executives have also been completed, with Ellison, former FTX CEO Sam Bankman-Fried and former FTX Digital Markets co-CEO Ryan Salame currently in prison serving years-long sentences. Bankman-Fried is appealing his conviction and 25-year sentence.
Magazine: ‘Hong Kong’s FTX’ victims win lawsuit, bankers bash stablecoins: Asia Express
This article first appeared at Cointelegraph.com News
