FTX sues Binance and Changpeng Zhao in attempt to recover $1.76 billion

Bankrupt crypto company FTX has filed a lawsuit against Binance and its CEO Changpen Zhao, seeking to recover $1.76 billion.

According to FTX, these funds were fraudulently transferred during a share buyback transaction in 2021. The lawsuit alleges that FTX transferred this amount to FTT, BNB and BUSD as part of the buyback of Binance’s 20% stake in FTX, originally acquired in 2019.

At the time of that buyback , FTX’s sister company, Alameda Research, was allegedly in bankruptcy, using $1 billion of FTX depositors’ funds to complete the deal, as former Alameda CEO Carolyn Ellison testified.

The lawsuit also accuses Zhao of prompting the market decline by tweeting about Binance’s plans to sell its stake in FTT in November 2022, which triggered massive withdrawals and ultimately led to FTX’s collapse. Binance denies these accusations, calling them “baseless.”