FTX Sues Binance and Changpeng ‘CZ’ Zhao for $1.8 Billion

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As a seasoned crypto investor with years of experience navigating the volatile and often opaque world of digital assets, this latest development between FTX and Binance has left me both intrigued and skeptical. The allegations are grave, and if proven true, they could reshape the landscape of the industry significantly.

In simpler terms, FTX – a cryptocurrency exchange that recently declared bankruptcy – has initiated a legal action against Binance, its former CEO Changpeng Zhao, and other high-ranking officials. This lawsuit, submitted in the Delaware Bankruptcy Court, aims to recover approximately $1.8 billion that FTX claims were illegitimately moved over to Binance.

According to FTX, the money transfers took place as part of a questionable share buyback agreement in July 2021, a time when the trading platform was already facing financial difficulties and technically bankrupt.

As per court documents disclosed by the FTX estate on Sunday, they offloaded approximately 20% of their holdings in the company’s overseas branch and about 18.4% of their domestic operations (in the U.S.) during this deal.

Moreover, FTX alleges that Zhao posted tweets containing false or misleading information which significantly impacted the decline of the exchange.

In the court case, FTX claims that Binance and its leaders acquired funds through a deceitful financial transfer. Additionally, they assert that Zhao posted a sequence of “misleading, deceptive, and fraudulent tweets” which worsened the situation and eventually contributed to FTX’s bankruptcy.

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2024-11-11 14:13