FTX Sues Cryptocurrency Exchange Binance and Former CEO Zhao

Foreks - FTX has filed a lawsuit against Binance and former CEO Changpeng Zhao with the aim of recovering at least $1.76 billion, citing a "fraudulent" stock transaction as the basis for the claim.

In its petition to the Delaware court, FTX refers to a transaction in 2021 in which Binance, Zhao, and others exited their investments in FTX, selling their 20% stake in the platform and their 18.4% stake in West Realm Shires, based in the U.S., back to the company.

FTX alleges that the buyback was financed through a combination of the exchange's tokens, as well as Binance's dollar-pegged stablecoin, by its Alameda Research division. The lawsuit, which asserts that "Alameda was insolvent at the time of the buyback and lacked the means to finance the transaction," labels the agreement made with FTX co-founder Sam Bankman-Fried as a "constructively fraudulent transfer."