FTX Launches Legal Action to Recoup $21 Million from LayerZero Labs


FTX, in an effort to recoup the $21 million it lost due to its bankruptcy, has filed a lawsuit against LayerZero Labs, a business that creates protocols for cross-chain transactions. The funds were allegedly taken in violation of the laws just before FTX went bankrupt in November 2022. LayerZero has responded to the lawsuit, with CEO Bryan Pellegrino denying the accusation that withdrawals were subject to preferential information.

The lawsuit is centered on an arrangement that allowed Alameda Research to resell a 5% stake in LayerZero worth $150 million in exchange for LayerZero tolerating a $45 million debt. Additionally, the lawsuit brings attention to a deal that was not completed involving 100,000,000 STG tokens which LayerZero had promised to buy back with a discounted price of $10 million but never did. Pellegrino believes the action is intended to prolong the case so as to rack up additional legal costs.

Pellegrino revealed that in the month before bankruptcy, he personally deposited millions, including $1,000,000 as recently as November 7. He also stated that the lawsuit is filled with unsupported claims and that LayerZero has been attempting to discuss the matter of share ownership with FTX’s liquidators for almost a year but has received no response.

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