FTX's estate is seeking to recover approximately $1.8 billion related to “fraudulent” trades allegedly orchestrated by Sam Bankman Freed against rival company Binance and its former CEO Chao Changpeng. filed a lawsuit.
The filing was filed Sunday in Delaware Bankruptcy Court. lawsuit It focuses on the 2021 stock buyback agreement between Bankman Freed, who is currently in prison for fraud, and key Binance executives.
Mr. Zhao and his allies acquired an approximately 20% stake in FTX's international operations and an 18.4% stake in a U.S.-based affiliate in exchange for a huge amount of cryptocurrency, worth $1.76 billion at the time. Sold.
Administrators of the now-defunct FTX say the company and its doomed sister cryptocurrency company, Alameda Research, “may have been insolvent from inception, with a clear balance sheet by early 2021.” “The company was insolvent,'' meaning that the stock buyback transaction was fundamentally fraudulent.
The complaint further alleges that after selling his shares, Zhao “conspired to destroy” FTX, including “a series of maliciously calculated false, misleading and fraudulent Tweet,” which he said led to the company's collapse.
“Mr. Zhao's false tweets triggered a predictable avalanche of withdrawals from FTX, a proverbial bank run that Mr. Zhao knew would collapse FTX,” the complaint states.
Binance denied the allegations in the lawsuit.
“The allegations are baseless and we will vigorously defend ourselves,” a Binance spokesperson said in a statement.
FTX, once a cryptocurrency company with a market capitalization of $32 billion, fell into bankruptcy in November 2022. It was later revealed that Bankman Freed had stolen billions of dollars in customer funds to support risky bets by Alameda.
As the complaint points out, FTX's meltdown comes after CoinDesk published an article revealing that Alameda Research had invested heavily in FTT, a cryptocurrency token issued by FTX itself. It started later.
The lawsuit cites multiple tweets from Zhao that are said to be intended to incite panic about the revelations, including a post on November 6, 2022 explaining Binance's decision to sell its FTT token holdings. . As “just post-withdrawal risk management”.
“Zhao's intention was to maximize his impact on the market and cause a decline in the FTT price, thereby harming FTX and increasing Binance's market share,” the complaint states. There is.
Bankman Fried was sentenced to 25 years in prison last March for his role in the collapse of FTX.
Separately, Mr. Zhao served a four-month sentence for violating US law against money laundering and was released in September.
Prosecutors had previously said that Binance, under Zhao's direction, had failed to report suspicious cryptocurrency transactions by terrorist organizations such as Hamas and al-Qaeda. Binance agreed to pay a $4.32 billion fine as part of the lawsuit.
Zhao has since stepped down as CEO of Binance, but remains a major shareholder.
with post wire
