FTX sues LayerZero Labs, seeks to recover over $21M moved prior to bankruptcy
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against cross-chain protocol LayerZero Labs, seeking to recover $21 million in funds that were allegedly illegally withdrawn prior to FTX's shutdown in November 2022, according to court documents filed on September 9.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 — 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 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.
Super excited to work with @LayerZero_Labs!
They're building out a key missing piece of crypto infrastructure--cross-chain liquidity.
And more importantly, they're doing a great job of building great products. https://t.co/TvEC6sfpeE
Amidst these transactions, in February, LayerZero loaned $45 million to Alameda Ventures’ parent, Alameda Research, under a promissory note bearing an annual interest rate of 8%.
When FTX's crisis unfolded in early November, LayerZero sought a deal for the return of its stake owned by Alameda. 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.
put simply
we did indeed buy all of the tokens (back)
better is better
- RAZ
