The bankrupt cryptocurrency exchange FTX has sued crypto exchange Binance and its former head Changpeng Zhao, demanding it repay about $1.8bn.
FTX alleges that Binance and Mr Zhao received the funds in 2021 in a fraudulent share repurchase transaction. In the course of that transaction, they sold then FTX CEO Sam Bankman-Fried about 20 per cent of FTX’s international unit and 18.4 per cent of its US unit.
According to the complaint, Bankman-Fried paid $1.76bn to buy back the shares using a combination of the FTX FTT exchange token and Binance BNB and BUSD coins.
The plaintiffs allege that FTX and its trading subsidiary Alameda Research were balance sheet insolvent by early 2021, so the share repurchase transaction was conducted using fraudulent schemes.
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