30s Summary

Several firms involved in the FTX bankruptcy case have filed a lawsuit against Binance, seeking to recover about $1.8 billion. They accuse Binance and its former CEO Changpeng Zhao of obtaining $1.76 billion in cryptocurrency through a questionable transfer from FTX. The transfer took place when Binance repurchased shares from FTX co-founder Sam Bankman-Fried, who is currently serving a 25-year jail term. The plaintiffs argue that FTX and Alameda Research were likely insolvent from the start, rendering the share buyback deal fraudulent.

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The bankruptcy case involving FTX keeps getting more intense as more lawsuits are brought against different crypto companies. A bunch of firms linked to the FTX bankruptcy case have kicked off a lawsuit against popular crypto exchange platform, Binance. Their goal’s to get back about $1.8 billion, as per a file they submitted on Nov. 10.

In the file, they claim Binance, its previous CEO Changpeng “CZ” Zhao, and some other Binance big shots scooped up at least $1.76 billion in crypto through a dodgy transfer from FTX.

This transfer happened in July 2021 when Binance bought back some shares from Sam Bankman-Fried, who co-founded FTX. This guy is now in jail for 25 years. During this deal, Bankman-Fried sold off about a 20% and 18.4% stake in the international branch of FTX and its US branch, West Realm Shires Services, also doing business as FTX US.

In the submitted file, the payment for this share buyback was done using a blend of FTX’s own FTX Token (FTT) and two Binance-operated tokens, BNB and Binance USD (BUSD). The total value of these tokens was around $1.76 billion then.

FTX and its associate trading platform Alameda Research “may have been insolvent from the start and were likely balance-sheet insolvent by early 2021,” according to those who filed the lawsuit. They are saying that because FTX was broke, the deal to buy back shares was fraudulent.

This story is still developing. We’ll give you more updates as we get them.