Bankrupt FTX Crypto Exchange Has archived a lawsuit against cross-chain protocol LayerZero Labs, seeking to recover $21 million in funds that were allegedly illegally withdrawn before FTX's closure in November 2022, according to court documents filed on September 9.
The case dates back to transactions made between January and May 2022, between Alameda Ventures, the venture capital arm of Alameda Research, FTX's sister company, and LayerZero.
According to the court filing, Alameda Ventures paid more than $70 million in two transactions to acquire an approximately 4.92% stake in LayerZero. Additionally, in March, Alameda Ventures paid another $25 million for 100 million STG tokens in a public auction, which will be distributed over a six-month period starting in March 2023.
Super excited to work with @LayerZero_Labs!
They are building a key missing piece of crypto infrastructure: cross-chain liquidity.
And more importantly, they are doing a great job creating great products. https://t.co/TvEC6sfpeE
- SBF (@SBF_FTX) March 30, 2022
Amid these transactions, in February, LayerZero loaned $45 million to Alameda Ventures' parent company, Alameda Research, under a promissory note with an annual interest rate of 8%.
When the FTX crisis unfolded in early November, LayerZero sought an agreement for the return of its stake owned by Alameda. The agreement included the return of shares to LayerZero in exchange for forgiveness of the $45 million loan. Another deal was also reached involving 100 million STG tokens, which LayerZero bought back at a $10 million discount on November 9. However, this transaction was never completed. LayerZero did not pay the tokens and Alameda Ventures did not transfer them.
in a nutshell
In fact, we bought all the tokens (return).
better is better
-RAZ and Bryan https://t.co/anBSloYRLV
โ raz (@ryanzarick) November 10, 2022
FTX alleges in the lawsuit that LayerZero exploited Alameda Ventures during a liquidity crisis:
"LayerZero was well aware that Alameda Research was facing a liquidity crisis and, within approximately 24 hours, negotiated a liquidation transaction with Caroline Ellison, the then CEO of Alameda Research."
Along with canceling the deals, the lawsuit seeks recovery of funds withdrawn days before FTX filed for bankruptcy, including approximately $21.37 million from LayerZero Labs, as well as $13.07 million from Ari Litan.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. Jump and goose.
LayerZero Labs is not the first company sued by FTX. The bankrupt company is also trying to recover billions in funds from transactions carried out by various subsidiaries before the collapse of his conglomerate.
Cointelegraph reached out to LayerZero Labs but did not receive a response at the time of publication. The lawsuit is not related to LayerZero Power Systems, a company that owns the LayerZero brand and does not operate in the crypto industry.
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