Outside Source
The estate argued that Sam Bankman-Fried’s $1.75 billion repurchase deal with Binance in July 2021 was a fraudulent transfer because of FTX’s insolvency.
News
The FTX bankruptcy estate continues filing lawsuits against cryptocurrency firms amid ongoing bankruptcy proceedings.
A group of firms involved in the FTX bankruptcy proceedings has initiated a lawsuit against cryptocurrency exchange Binance, seeking to recover $1.8 billion, according to a complaint filed on Nov. 10.
In the filing, the plaintiffs argued that Binance, its former CEO Changpeng “CZ” Zhao and other Binance executives received at least $1.76 billion worth of cryptocurrency in a fraudulent transfer from FTX.
The transaction was Binance’s July 2021 repurchase deal with Sam Bankman-Fried, the FTX co-founder who is now serving a 25-year prison term. In that transfer, Bankman-Fried sold stakes of about 20% in FTX’s international and 18.4% in its US-based entity, West Realm Shires Services, doing business as FTX US.
An excerpt from the FTX estate’s complaint against Binance. Source: Kroll
According to the filing, Bankman-Fried paid for the stock repurchase using a mix of FTX’s FTX Token (FTT) and Binance-operated BNB (BNB) and Binance USD (BUSD) valued at $1.76 billion at the time.
FTX and its sister trading platform Alameda Research “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021,” the estate argued in the filing. Due to the insolvency, the share repurchase deal was a fraudulent transaction, the estate alleged.
This is a developing story, and further information will be added as it becomes available.
This article first appeared at Cointelegraph.com News
