FTX Pursues $1.8 Billion from Binance in High-Stakes Crypto Lawsuit

   The cryptocurrency world faces another seismic shift as FTX, the fallen crypto giant, takes legal action against its former rival Binance. FTX seeks to reclaim $1.8 billion allegedly transferred fraudulently by its disgraced founder, Sam Bankman-Fried. This lawsuit marks a new chapter in the ongoing saga of crypto industry turmoil. FTX filed the lawsuit in Delaware on November 11, 2024. The case centers on a 2021 share repurchase deal between FTX and Binance. FTX claims this transaction was fraudulent due to its insolvency at the time. The deal involved Binance selling back its 20% stake in FTX‘s international unit and 18.4% in its U.S. entity. Bankman-Fried allegedly orchestrated this buyback using customer funds from FTX. He tapped into Alameda Research, FTX’s sister company, to finance the deal. This move potentially violated financial regulations and customer trust. The lawsuit argues that both FTX and Alameda were likely insolvent from their inception. FTX vs. Binance The legal action also targets Binance‘s former CEO, Changpeng Zhao. FTX accuses Zhao of making misleading statements that contributed to its downfall. A series of tweets by Zhao in November 2022 allegedly triggered a bank run on FTX. This event ultimately led to the exchange’s collapse and bankruptcy. Binance strongly denies these allegations. The company vows to defend itself vigorously against what it calls “baseless” claims. This stance sets the stage for a protracted legal battle between two former crypto powerhouses. The lawsuit comes amid a broader effort by FTX to recover assets for its creditors. The company has filed multiple lawsuits against various entities and individuals. These include crypto exchange Crypto.com and former Trump administration official Anthony Scaramucci. This legal action unfolds against a backdrop of regulatory scrutiny in the crypto industry. Bankman-Fried’s recent 25-year prison sentence highlights the serious consequences of financial misconduct. Zhao’s own legal troubles, including a four-month prison term, further underscore the industry’s challenges. The cryptocurrency market continues to evolve despite these legal battles. Bitcoin recently reached new all-time highs, trading above $82,000. This price surge occurred partly due to Donald Trump’s victory in the U.S. elections. The contrast between market optimism and ongoing legal issues reflects the crypto world’s volatile nature. FTX’s bankruptcy plan, approved in October 2024, aims to reimburse customers fully. This ambitious goal faces significant hurdles, including the outcome of this lawsuit. The plan’s success could restore some faith in the crypto ecosystem’s ability to self-correct.