FTX sues Binance for $1.76B in battle of crypto exchanges founded by convicts
The bankruptcy estate of collapsed cryptocurrency exchange FTX has sued the company's former rival Binance in an attempt to recover $1.76 billion or more. The lawsuit seeks "at least $1.76 billion that was fraudulently transferred to Binance and its executives at the FTX creditors' expense, as well as compensatory and punitive damages to be determined at trial."
The complaint filed yesterday in US Bankruptcy Court in Delaware names Binance and co-founder and former CEO Changpeng Zhao among the defendants. FTX founder Sam Bankman-Fried sold 20 percent of his crypto exchange to Binance in November 2019, but Binance exited that investment in 2021, the lawsuit said.
"As Zhao would later remark, he decided to exit his position in FTX because of personal grievances he had against Bankman-Fried," the lawsuit said. "In July 2021, the parties negotiated a deal whereby FTX bought back Binance's and its executives' entire stakes in both FTX Trading and [parent company] WRS. Pursuant to that deal, FTX's Alameda Research division directly funded the share repurchase with a combination of FTT (FTX's exchange token), BNB (Binance's exchange token), and BUSD (Binance's dollar-pegged stablecoin). In the aggregate, those tokens had a fair market value of at least $1.76 billion."