Bankrupt FTX Files Lawsuit Against LayerZero Labs for Alleged Illegal Fund Withdrawal
Summary:
Bankrupt exchange FTX sues LayerZero Labs for the alleged illegal withdrawal of $21 million before FTX's shutdown. FTX seeks to recover the funds. The lawsuit claims that LayerZero took advantage of Alameda Ventures during a liquidity crisis. FTX aims to retrieve funds from LayerZero Labs, its former COO, and a subsidiary.
Bankrupt cryptocurrency exchange FTX has taken legal action against LayerZero Labs, a cross-chain protocol, in an effort to recover $21 million in funds that were allegedly unlawfully withdrawn before FTX's closure in November 2022. According to court documents filed on September 9, the dispute dates back to transactions between Alameda Ventures and LayerZero, where Alameda Ventures paid over $70 million to acquire a 4.92% stake in LayerZero. Additionally, LayerZero loaned $45 million to Alameda Ventures' parent company, Alameda Research, in February. The lawsuit claims that LayerZero took advantage of Alameda Ventures during a liquidity crisis, and seeks the return of funds withdrawn before FTX's bankruptcy filing. FTX is pursuing recovery of funds from LayerZero Labs, its former COO Ari Litan, and subsidiary Skip & Goose. It's worth noting that this lawsuit is separate from FTX's attempts to retrieve funds from other subsidiaries before its collapse.
Published At
9/10/2023 7:10:45 PM
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