FTX is suing finance, along with its former CEO CZ, for $1.8 billion.
Transcript:
Conway Gittens: The stock market is coming off of its best week of the year and extending that rally into this new week. Bitcoin jumped above $82,000 for the first time on belief the next White House and Congress will be more favorable to digital assets. The record high also comes amid news that Microstrategy, the biggest corporate holder of bitcoin, recently added $2 billion to its stake.
Sticking with the world of digital assets, time has not healed the bitter feud between U.S. cryptocurrency exchange FTX and its larger rival Binance.
FTX has filed a lawsuit against Binance and former company CEO Changpeng Zhao for roughly $1.8 billion.
The lawsuit claims that through a complex transaction, Binance sold a 20 percent stake in FTX in 2021 by reselling those shares to FTX through funding by FTX’s sister company Alameda Research. But according to the suit “Alameda was insolvent at the time of the share repurchase and could not afford to fund the transaction.” Therefore the lawsuit alleges it was a “fraudulent” share deal. FTX CEO Sam Bankman-Fried signed off on the transaction as his crypto empire was imploding, due in large part to a series of tweets made by Zhao.
Binance called the allegations “meritless,” according to a statement emailed to CNBC.
Bankman-Fried was sentenced in March 2024 to a 25-year sentence for fraud and theft, responsible for spiraling his $32 billion empire into bankruptcy.
In an unrelated case, Zhao and Binance plead guilty in 2023 to breaking the U.S. Bank Secrecy Act. The settlement included $4.3 billion in penalties and Zhao was forced to step down as CEO.
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