1 year ago
The bankrupt property of cryptocurrency speech FTX is suing blockchain institution Layerzero Labs successful an effort to claw backmost a $45 cardinal woody and implicit $40 cardinal successful withdrawals made successful the days earlier FTX filed for bankruptcy. The suit alleges that Layerzero exploited FTX’s fiscal distress to negociate a fire-sale transaction conscionable anterior to the bankruptcy filing. Layerzero’s co-founder and CEO Bryan Pellegrino, however, says the suit “is filled with unsubstantiated claims.”
Layerzero Accused of Exploiting FTX’s Distress: Lawsuit Highlights Purported Fraudulent Activities
The complaint filed by FTX accuses Layerzero of fraudulent transfers, unjust enrichment, and violations of the automatic bankruptcy stay. It seeks to retrieve equity that FTX subsidiary Alameda Ventures transferred to Layerzero arsenic good arsenic alleged cryptocurrency withdrawals from FTX by Layerzero employees.
FTX claims that successful November 2022, arsenic the speech faced a terrible liquidity crisis, Layerzero demanded contiguous repayment of a $45 cardinal indebtedness to Alameda Ventures. Layerzero past negotiated a woody whereby Alameda Ventures transferred its astir $150 cardinal equity involvement successful Layerzero successful speech for forgiveness of the loan.
The suit claims this was a fraudulent transportation made by FTX insiders similar Caroline Ellison to fell assets from creditors. It besides alleges that Layerzero employees including erstwhile main operating officer, Ari Litan, reportedly withdrew implicit $40 cardinal worthy of assets from FTX speech accounts successful usurpation of bankruptcy penchant laws.
According to FTX, these withdrawals from Layerzero occurred connected November 7 and 8, 2022, conscionable 1 oregon 2 days earlier FTX halted lawsuit withdrawals. The suit asserts that Layerzero exploited its wrong cognition of FTX’s fiscal troubles for its ain benefit.
In summation to recouping the alleged fraudulent transfers and improper withdrawals, FTX is seeking to disallow claims filed by Layerzero against the FTX bankruptcy estate. FTX claims that Layerzero violated the automatic enactment by attempting to instrumentality power of crypto tokens post-bankruptcy. Following the suit filing, the CEO of Layerzero, Bryan Pellegrino, denied the claims connected the societal media level X.
“Regarding the FTX suit, the full suit is filled with unsubstantiated claims. We person been successful connection with the FTX liquidators for astir a twelvemonth present and person clip and clip again attempted to proactively code the contented of ownership of the shares with them and person been ignored for the full time,” Pellegrino wrote.
“To spot them hold each this clip to record a suit filled with unsubstantiated claims leads maine to judge the intent is not to settee the contented but simply prolong the process successful hopes of receiving much ineligible fees,” helium added.
What bash you deliberation astir FTX suing Layerzero? Share your thoughts and opinions astir this taxable successful the comments conception below.
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