The estate of collapsed cryptocurrency exchange FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao, seeking to recover at least $1.76 billion over “fraudulent” stock trading.
In a filing in a Delaware court on Sunday, FTX cited a 2021 transaction in which Binance, Zhao and others exited investments in FTX, selling a 20% stake in the platform along with its U.S. entity West Realm Shires 18.4% of the shares to the company.
FTX Industries claimed that the share buyback was funded by FTX’s Alameda Research arm through a combination of the company’s and Binance’s exchange tokens and Binance’s U.S. dollar-pegged stablecoin.
“Alameda was already insolvent at the time of the stock repurchase and was unable to fund the transaction,” the lawsuit states, noting the deal with FTX co-founder Sam Bankman-Fried, who is currently serving a 25-year sentence on fraud-related charges. imprisonment.
CNBC has reached out to Binance for comment.
The lawsuit marks the latest escalation in tensions between the two biggest players in the cryptocurrency space, after FTX’s plunge rocked the market.
This breaking news story is being updated.
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