The crypto world is reeling from yet another shocking twist.
FTX has filed a lawsuit against Binance Holdings Ltd. and its former CEO, Changpeng Zhao (CZ), in an effort to recover nearly $1.8 billion in funds. The bankrupt exchange claims that its co-founder, Sam Bankman-Fried, fraudulently transferred these funds, which were later received by Binance, Zhao, and other executives as part of a deal made in July 2021.
How did this go unnoticed? Let’s understand.
The lawsuit reveals that Binance and FTX entered into a share repurchase agreement, where Binance bought stakes in FTX’s international unit (20%) and its U.S. entity (18.4%). At the time, Bankman-Fried, who is currently in prison, led FTX and is said to have organized the transaction.
FTX is now trying to recover these assets, accusing Binance and Zhao of benefiting from a fraudulent deal that contributed to the exchange’s collapse.
The outcome of this lawsuit could have serious consequences for Binance, its executives, and the cryptocurrency industry as a whole.
FTX has also accused Zhao of contributing to the panic that led to a surge in withdrawals from the platform.
The exchange claims that misleading tweets from CZ caused fear among users, which played a role in the mass withdrawals that eventually led to FTX’s downfall.
Another day, another lawsuit… Stay tuned for what’s next in FTX vs Binance!
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