FTX Files Lawsuit Against LayerZero Labs to Recover $21 Million Before Bankruptcy

10:35 pm
September 10, 2023
Featured image for “FTX Files Lawsuit Against LayerZero Labs to Recover $21 Million Before Bankruptcy”

FTX, the bankrupt crypto exchange, has recently filed a lawsuit against LayerZero Labs, a cross-chain protocol, in an attempt to recover $21 million that was allegedly withdrawn illegally prior to FTX’s shutdown in November 2022. The lawsuit claims that LayerZero took advantage of Alameda Ventures, the venture capital arm of Alameda Research, FTX’s sister company, during a liquidity crisis. The funds in question were part of several transactions between Alameda Ventures and LayerZero made between January and May 2022.

The court documents reveal that Alameda Ventures paid over $70 million to acquire a 4.92% stake in LayerZero. Additionally, in March, Alameda Ventures purchased 100 million STG tokens for $25 million, to be distributed from March 2023 onwards.

During these transactions, LayerZero also loaned $45 million to Alameda Ventures’ parent company, Alameda Research, with an 8% annual interest rate. When FTX faced its crisis in November, LayerZero sought a deal to return its stake in exchange for forgiving the $45 million loan. Another deal involving the purchase of 100 million STG tokens was also agreed upon, but it was never completed.

In the lawsuit, FTX is seeking the recovery of funds withdrawn before the bankruptcy filing, which includes approximately $21.37 million from LayerZero Labs, $13.07 million from its former COO Ari Litan, and $6.65 million from a subsidiary named Skip & Goose.

FTX is currently trying to recoup billions in funds from transactions made by various subsidiaries before the collapse of its conglomerate. This is not the first lawsuit filed by FTX against another company. The lawsuit is not related to LayerZero Power Systems, an unrelated company that owns the LayerZero trademark and is not involved in the crypto industry.

Summary

Bankrupt crypto exchange FTX has sued LayerZero Labs, a cross-chain protocol, to recover $21 million in funds that were allegedly withdrawn illegally before FTX’s shutdown in November 2022. The funds were part of transactions between Alameda Ventures and LayerZero. FTX is also seeking the recovery of funds from other subsidiaries before the collapse of its conglomerate.

FAQs

What is FTX?

FTX is a cryptocurrency exchange that filed for bankruptcy in November 2022.

What is LayerZero Labs?

LayerZero Labs is a cross-chain protocol that is being sued by FTX for the alleged illegal withdrawal of funds.

What is Alameda Ventures?

Alameda Ventures is the venture capital arm of Alameda Research, which is FTX’s sister company. It was involved in transactions with LayerZero Labs.

What is the lawsuit about?

The lawsuit filed by FTX against LayerZero Labs is to recover $21 million that was allegedly withdrawn illegally before FTX’s shutdown. FTX claims that LayerZero took advantage of Alameda Ventures during a liquidity crisis.

Is LayerZero Labs the same as LayerZero Power Systems?

No, LayerZero Labs and LayerZero Power Systems are different entities. LayerZero Power Systems owns the LayerZero trademark but is not involved in the crypto industry.

Is FTX suing any other companies?

Yes, apart from LayerZero Labs, FTX is also trying to recoup billions in funds from transactions made by various subsidiaries prior to the collapse of its conglomerate.


Share:

More in this category ...

7:27 pm April 30, 2024

Ripple companions with SBI Group and HashKey DX for XRPL answers in Japan

Featured image for “Ripple companions with SBI Group and HashKey DX for XRPL answers in Japan”
6:54 pm April 30, 2024

April sees $25M in exploits and scams, marking historic low ― Certik

Featured image for “April sees $25M in exploits and scams, marking historic low ― Certik”
5:21 pm April 30, 2024

MSTR, COIN, RIOT and different crypto shares down as Bitcoin dips

Featured image for “MSTR, COIN, RIOT and different crypto shares down as Bitcoin dips”
10:10 am April 30, 2024

EigenLayer publicizes token release and airdrop for the group

Featured image for “EigenLayer publicizes token release and airdrop for the group”
7:48 am April 30, 2024

VeloxCon 2024: Innovation in knowledge control

Featured image for “VeloxCon 2024: Innovation in knowledge control”
6:54 am April 30, 2024

Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’

Featured image for “Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’”
2:58 am April 30, 2024

Dogwifhat (WIF) large pump on Bybit after record reasons marketplace frenzy

Featured image for “Dogwifhat (WIF) large pump on Bybit after record reasons marketplace frenzy”
8:07 pm April 29, 2024

How fintech innovation is riding virtual transformation for communities around the globe  

Featured image for “How fintech innovation is riding virtual transformation for communities around the globe  ”
7:46 pm April 29, 2024

Wasabi Wallet developer bars U.S. customers amidst regulatory considerations

Featured image for “Wasabi Wallet developer bars U.S. customers amidst regulatory considerations”
6:56 pm April 29, 2024

Analyst Foresees Peak In Late 2025

Featured image for “Analyst Foresees Peak In Late 2025”
6:59 am April 29, 2024

Solo Bitcoin miner wins the three.125 BTC lottery, fixing legitimate block

Featured image for “Solo Bitcoin miner wins the three.125 BTC lottery, fixing legitimate block”
7:02 pm April 28, 2024

Ace Exchange Suspects Should Get 20-Year Prison Sentences: Prosecutors

Featured image for “Ace Exchange Suspects Should Get 20-Year Prison Sentences: Prosecutors”
7:04 am April 28, 2024

Google Cloud's Web3 portal release sparks debate in crypto trade

Featured image for “Google Cloud's Web3 portal release sparks debate in crypto trade”
7:08 pm April 27, 2024

Bitcoin Primed For $77,000 Surge

Featured image for “Bitcoin Primed For $77,000 Surge”
5:19 pm April 27, 2024

Bitbot’s twelfth presale level nears its finish after elevating $2.87 million

Featured image for “Bitbot’s twelfth presale level nears its finish after elevating $2.87 million”
10:07 am April 27, 2024

PANDA and MEW bullish momentum cool off: traders shift to new altcoin

Featured image for “PANDA and MEW bullish momentum cool off: traders shift to new altcoin”
9:51 am April 27, 2024

Commerce technique: Ecommerce is useless, lengthy are living ecommerce

Featured image for “Commerce technique: Ecommerce is useless, lengthy are living ecommerce”
7:06 am April 27, 2024

Republic First Bank closed by way of US regulators — crypto neighborhood reacts

Featured image for “Republic First Bank closed by way of US regulators — crypto neighborhood reacts”
2:55 am April 27, 2024

China’s former CBDC leader is beneath executive investigation

Featured image for “China’s former CBDC leader is beneath executive investigation”
10:13 pm April 26, 2024

Bigger isn’t all the time higher: How hybrid Computational Intelligence development permits smaller language fashions

Featured image for “Bigger isn’t all the time higher: How hybrid Computational Intelligence development permits smaller language fashions”
7:41 pm April 26, 2024

Pantera Capital buys extra Solana (SOL) from FTX

Featured image for “Pantera Capital buys extra Solana (SOL) from FTX”
7:08 pm April 26, 2024

Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’

Featured image for “Successful Beta Service release of SOMESING, ‘My Hand-Carry Studio Karaoke App’”
12:29 pm April 26, 2024

SEC sues Bitcoin miner Geosyn Mining for fraud; Bitbot presale nears $3M

Featured image for “SEC sues Bitcoin miner Geosyn Mining for fraud; Bitbot presale nears $3M”
10:34 am April 26, 2024

Business procedure reengineering (BPR) examples

Featured image for “Business procedure reengineering (BPR) examples”
7:10 am April 26, 2024

85% Of Altcoins In “Opportunity Zone,” Santiment Reveals

Featured image for “85% Of Altcoins In “Opportunity Zone,” Santiment Reveals”
5:17 am April 26, 2024

Sam Altman’s Worldcoin eyeing PayPal and OpenAI partnerships

Featured image for “Sam Altman’s Worldcoin eyeing PayPal and OpenAI partnerships”
10:55 pm April 25, 2024

Artificial Intelligence transforms the IT strengthen enjoy

Featured image for “Artificial Intelligence transforms the IT strengthen enjoy”
10:04 pm April 25, 2024

Franklin Templeton tokenizes $380M fund on Polygon and Stellar for P2P transfers

Featured image for “Franklin Templeton tokenizes $380M fund on Polygon and Stellar for P2P transfers”
7:13 pm April 25, 2024

Meta’s letting Xbox, Lenovo, and Asus construct new Quest metaverse {hardware}

Featured image for “Meta’s letting Xbox, Lenovo, and Asus construct new Quest metaverse {hardware}”
2:52 pm April 25, 2024

Shiba Inu (SHIB) unveils bold Shibarium plans as Kangamoon steals the display

Featured image for “Shiba Inu (SHIB) unveils bold Shibarium plans as Kangamoon steals the display”