Crypto News Today: Why Is FTX Demanding $1.8 Billion from Binance?
Vijay Gir11 Nov 20241 min read
The crypto world is reeling from yet another shocking twist.
FTX has filed a lawsuit against Binance Holdings Ltd. and its former CEO, Changpeng Zhao (CZ), in an effort to recover nearly $1.8 billion in funds. The bankrupt exchange claims that its co-founder, Sam Bankman-Fried, fraudulently transferred these funds, which were later received by Binance, Zhao, and other executives as part of a deal made in July 2021.
How did this go unnoticed? Let’s understand.
Details of the “Fraud” Deal
The lawsuit reveals that Binance and FTX entered into a share repurchase agreement, where Binance bought stakes in FTX’s international unit (20%) and its U.S. entity (18.4%). At the time, Bankman-Fried, who is currently in prison, led FTX and is said to have organized the transaction.
FTX is now trying to recover these assets, accusing Binance and Zhao of benefiting from a fraudulent deal that contributed to the exchange’s collapse.
What This Lawsuit Means for Binance
The outcome of this lawsuit could have serious consequences for Binance, its executives, and the cryptocurrency industry as a whole.
FTX has also accused Zhao of contributing to the panic that led to a surge in withdrawals from the platform.
The exchange claims that misleading tweets from CZ caused fear among users, which played a role in the mass withdrawals that eventually led to FTX’s downfall.
Another day, another lawsuit… Stay tuned for what’s next in FTX vs Binance!
