FTX has filed a lawsuit against Binance, and its former CEO Changpeng Zhao. According to the filing, the fallen crypto exchange wants to recover about $1.8 billion transferred by its former CEO Sam Bankman-Fried to the platform. The funds were tied to a stock repurchase deal in 2021.
This lawsuit comes after FTX’s suit against Anthony Scaramucci and his company, Skybridge Capital. Like the one against Scaramucci, this lawsuit seeks to recoup funds to pay some creditors. It is also one of the 23 lawsuits filed by FTX in the Bankruptcy Court in the District of Delaware.
FTX makes moves to recover funds from Binance
According to several sources, SBF made a deal to repurchase FTX’s United States and international shares in 2021. In the deal, Binance and its former CEO CZ received $1.76 million worth of FTT tokens along with BNB and BUSD for a 20% sale of the exchange’s international unit, and 18.4% of its United States entity.
In the filing, FTX claimed that FTX and Alameda were insolvent in 2021, thus rendering the deal fraudulent. The estate also argues that former CEO Bankman-Fried acted in a reckless and manipulative way.
It also accused CZ of posting malicious tweets against the exchange before its collapse. The filing included a tweet where the Binance boss talked about selling his FTT tokens in 2022, leading to massive withdrawals.
The FTT token is doing well in the market, registering a jump of 29% over the last week. It is currently trading at $2.06, boasting a trading volume of $120 million.
The filing is targeting SBF’s influence buying
The lawsuit is one of the many lawsuits filed by FTX against former affiliates and individuals. The list also includes Skybridge Capital boss Anthony Scaramucci, and crypto platform Crypto.com, as the bankruptcy proceedings continue. Binance is yet to release an official statement in response to the lawsuit.
In the filing, FTX claimed that its former CEO Bankman-Fried was involved in influence-buying during the crypto winter of 2022. He used lavish cash gifts and investments to strengthen his influence in politics and finance.
It noted that SBF invested $67 million into Skybridge Capital to bail out the struggling fund. It was during the period that the hedge fund called for support after its assets under management dropped from $9 billion to $2.2 billion.
In September 2022, the company’s venture division invested to acquire a 30% stake. Financial details were not revealed, but Scaramucci spoke well about what it meant to the firm. FTX now notes that the investment didn’t yield any major benefits as they were made to increase SBF’s influence in the financial and political industry. The collapsed crypto exchange is now going after these investments as it claims they didn’t offer any real returns to the firm, terming it as investments to prop up SBF’s ego and standing.