Bankrupt cryptocurrency exchange FTX is suing several altcoin projects and crypto companies for allegedly withdrawing funds from its platform before it was shut down.
FTX demands $20 million back as part of recovery lawsuit
In a hot development, FTX has filed a lawsuit against LayerZero, alleging that $21 million was illegally withdrawn before its platform shut down. The exchange aims to recover millions from the former COO and the subsidiary.
The exchange is also seeking approximately $13.07 million and $6.65 million from Ari Litan, the former chief operating officer of LayerZero Labs and its subsidiary Skip & Goose. It accuses LayerZero of using internal information to withdraw funds before bankruptcy and withdrawals were banned. Details came from Sunil, the biggest representative of FTX receivables on social media:
FTX files clawback (90-day pref.) lawsuit against
Layer Zero: $21m (Aug-Nov)
Ari Litan: $13m (8th/9th Nov)
Skip & Goose (Litan owned): $6.5m (Aug-Nov)Used insider knowledge to exploit the situation pic.twitter.com/NYQnZgvWyb
— Sunil (FTX Creditor Champion) (@sunil_trades) September 9, 2023
On November 11, 2022, we reported that LayerZero published a document stating that it had repurchased 100% of the equity capital, currency rights and all other agreements from FTX/FTX Ventures/Alameda Research. The total value of the assets currently held by the foundation is 134 million dollars.
The bankrupt exchange went after all its partners
In addition to the lawsuit, FTX is also examining payments made to high-profile celebrities and sports figures who supported the platform before it went bankrupt. Some of the celebrities on the list include Shaquille O’Neal, Naomi Osaka, and Stephen Curry. FTX aims to recover funds following the collapse of Sam Bankman-Fried’s crypto platform.
FTX had $3.4 billion worth of cryptocurrency in April. According to reports, the exchange is planning to liquidate its reserves. The exchange aims to sell $200 million worth of crypto every week. Although there is no confirmation on the start date yet, many are reporting that it will be on September 13th.
Watch out for September 13: FTX may empty the market of altcoin reserves
cryptokoin.com As we reported, the US court is about to give the green light to the FTX bankruptcy team for altcoin sales. According to reports, the exchange currently holds $3.4 billion worth of cryptocurrencies. September 13 may be the date when altcoin liquidation begins and these coins face massive sales. Coins and their weights are as follows:
- Solana (SOL): $685 million (locked)
- FTX Token (FTT): $529 million
- Bitcoin (BTC): $268 million
- Ethereum (ETH): $90 million
- Aptos (APT): $67 million
- Dogecoin (DOGE): $42 million
- Polygon (MATIC): $39 million
- BitTorrent (BIT): $35 million
- Toncoin (TON): $31 million
- XRP (XRP): $29 million
Big selling pressure is potentially coming next week🚨
FTX will likely get approval to liquidate its assets on Sept. 13.
FTX had $3.4B in crypto in April. The proposed plan is to sell assets worth up to $200M per week. pic.twitter.com/4aHnhOVKP1
— The DeFi Investor 🔎 (@TheDeFinvestor) September 9, 2023
We should point out that former FTX executives were also released with a fine in exchange for a confession.
