{"id":153227,"date":"2023-09-11T00:56:01","date_gmt":"2023-09-10T19:26:01","guid":{"rendered":"https:\/\/dripp.zone\/news\/?p=153227"},"modified":"2023-09-11T00:56:01","modified_gmt":"2023-09-10T19:26:01","slug":"ftx-sues-layerzero-labs-seeks-to-recover-over-21m-moved-prior-to-bankruptcy-crypto-news","status":"publish","type":"post","link":"https:\/\/dripp.zone\/news\/ftx-sues-layerzero-labs-seeks-to-recover-over-21m-moved-prior-to-bankruptcy-crypto-news\/","title":{"rendered":"FTX sues LayerZero Labs, seeks to recover over $21M moved prior to bankruptcy – Crypto News"},"content":{"rendered":"
\n

Bankrupt crypto exchange FTX has filed<\/a> a lawsuit against cross-chain protocol LayerZero Labs, seeking to recover $21 million in funds that were allegedly illegally withdrawn prior to FTX’s shutdown in November 2022, according to court documents filed on September 9.<\/p>\n

The case traces back to transactions made from January to May 2022, between Alameda Ventures \u2014 the venture capital arm of Alameda Research, FTX’s sister company \u2014 and LayerZero.<\/p>\n

According to the court filing, Alameda Ventures paid more than $70 million in two transactions to acquire a stake of roughly 4.92% in LayerZero. Also, in March, Alameda Ventures paid another $25 million for 100 million STG tokens at a public auction, to be distributed over a period of six months beginning in March 2023.<\/p>\n

\n

Super excited to work with @LayerZero_Labs<\/a>!<\/p>\n

They’re building out a key missing piece of crypto infrastructure–cross-chain liquidity.<\/p>\n

And more importantly, they’re doing a great job of building great products. https:\/\/t.co\/TvEC6sfpeE<\/a><\/p>\n

\u2014 SBF (@SBF_FTX) March 30, 2022<\/a><\/p><\/blockquote>\n

Amidst these transactions, in February, LayerZero loaned $45 million to Alameda Ventures\u2019 parent, Alameda Research, under a promissory note bearing an annual interest rate of 8%.<\/p>\n

When FTX’s crisis unfolded in early November, LayerZero sought a deal for the return of its stake owned by Alameda<\/a>. The agreement included the return of shares to LayerZero in exchange for the forgiveness of the $45 million loan. Another deal related to 100 million STG tokens was also reached, which LayerZero purchased back at a discount for $10 million on Nov. 9. This transaction, however, was never completed. LayerZero did not pay for the tokens, and Alameda Ventures did not transfer the tokens.<\/p>\n

\n

put simply<\/p>\n

we did indeed buy all of the tokens (back)<\/p>\n

better is better<\/p>\n

– RAZ & Bryan https:\/\/t.co\/anBSloYRLV<\/a><\/p>\n

\u2014 raz (@ryanzarick) November 10, 2022<\/a><\/p><\/blockquote>\n

FTX alleges in the lawsuit that LayerZero exploited Alameda Ventures during a liquidity crisis:<\/p>\n

“LayerZero was well aware that Alameda Research was facing a liquidity crisis and, within about 24 hours, negotiated a fire-sale transaction with Caroline Ellison, Alameda Research\u2019s then-CEO.\u201d<\/p><\/blockquote>\n

Along with the agreements\u2019 cancellation, the complaint seeks recovery of funds withdrawn days before FTX bankruptcy filing, including approximately $21.37 million from LayerZero Labs, as well as $13.07 million from Ari Litan, its former chief operating officer, and $6.65 million from a subsidiary, Skip & Goose.<\/p>\n

LayerZero Labs isn’t the first company to be sued by FTX. The bankrupt company\u00a0is also attempting to recoup billions<\/a> in funds from transactions made by a number of subsidiaries before the collapse of its conglomerate. <\/p>\n

Cointelegraph reached out to LayerZero Labs, but did not receive a response at the time of publication.\u00a0The lawsuit is not related to LayerZero Power Systems, a company that owns the LayerZero trademark and does not operate in the crypto industry. \u00a0<\/p>\n

Magazine:\u00a0<\/em><\/strong>How smart people invest in dumb memecoins \u2014 3-point plan for success<\/em><\/strong><\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Bankrupt crypto exchange FTX has filed a lawsuit against cross-chain protocol LayerZero Labs, seeking to recover $21 million in funds that were allegedly illegally withdrawn prior to FTX’s shutdown in November 2022, according to court documents filed on September 9. The case traces back to transactions made from January to May 2022, between Alameda Ventures […]<\/p>\n","protected":false},"author":2,"featured_media":153228,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[235,203,210,234,231,232,237,238,236,233],"class_list":["post-153227","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-bitcoin","tag-crypto-currency","tag-elon-musk","tag-ethereum","tag-hyperledger","tag-ibm","tag-mining","tag-nodes","tag-spacex","tag-tesla"],"_links":{"self":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/153227","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/comments?post=153227"}],"version-history":[{"count":2,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/153227\/revisions"}],"predecessor-version":[{"id":153230,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/posts\/153227\/revisions\/153230"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media\/153228"}],"wp:attachment":[{"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/media?parent=153227"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/categories?post=153227"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dripp.zone\/news\/wp-json\/wp\/v2\/tags?post=153227"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}