The former CEO Changpeng Zhao and Binance are being sued by the defunct cryptocurrency corporation FTX, which claims that $1.8 billion was “fraudulently transferred” to Binance and its executives by FTX management.
TakeAway Points:
- FTX, a defunct cryptocurrency corporation, is suing Binance and Changpeng Zhao, its former CEO, claiming that FTX management “fraudulently transferred” $1.8 billion to Binance and its officials.
- According to the lawsuit, FTX’s Alameda Research division directly funded the share repurchase using tokens, which had a then-fair market value of $1.76 billion.
- Inflows into BlackRock’s spot Bitcoin ETF have topped $1 billion for the first time since it debuted in January.
FTX sues Binance
The lawsuit relates to Binance’s sale of its stake in Sam Bankman-Fried’s FTX, which it acquired in 2019 but then negotiated to sell back to FTX in July 2021.
According to the lawsuit, FTX’s Alameda Research division directly funded the share repurchase using tokens, which had a then-fair market value of $1.76 billion. Alameda, the lawsuit alleges, was insolvent at the time of buying the shares and could not therefore afford to fund the transaction, and it should not have been allowed to proceed.
“By this lawsuit, the Plaintiffs seek to recover, for the benefit of FTX’s creditors, at least $1.76 billion that was fraudulently transferred to Binance and its executives at the FTX creditors’ expense, as well as compensatory and punitive damages to be determined at trial,” the administrators for the FTX estate said in a filing made on Sunday in the U.S. state of Delaware.
“The claims are meritless, and we will vigorously defend ourselves.” Binance spokesperson said.
FTX was one of the largest cryptocurrency firms in the world before it collapsed in late 2022.
Arch-rival Binance, then led by Zhao, was set to come to its rescue and buy FTX’s non-U.S. unit as it struggled to stay afloat in November 2022, before Binance withdrew its offer.
FTX founder Bankman-Fried was sentenced in March this year to 25 years in prison for stealing $8 billion from customers. He has appealed the conviction.
Zhao was sentenced to four months in prison earlier this year after pleading guilty to violating U.S. laws against money laundering at the world’s largest cryptocurrency exchange.
BTC investors pour $1.1B into BlackRock ETF
BlackRock’s spot Bitcoin ETF has surpassed $1 billion in inflows for the first time since its launch in January.
The world’s largest asset manager, BlackRock, accumulated over $1 billion of inflows to its Bitcoin exchange-traded fund (ETF) across a record trading day as Bitcoin continued to break all-time highs.
On Nov. 7, BlackRock’s spot Bitcoin ETF (IBIT) clocked $1.1 billion in inflows, reclaiming inflow day status after two consecutive days of outflows totalling $113.3 million, according to Farside data.
Large inflow day follows surging trading volume
Bloomberg ETF analyst Eric Balchunas admitted he was “surprised” by the size of the inflows despite already expecting a large number based on the previous day’s trading volume.
“Told y’all it was prob gonna be big, altho even I am surprised it’s that big, by far biggest one day flow of any btc etf ever,” Balchunas wrote in a Nov. 7 X post.
On Nov. 6, Balchunas pointed out that the IBIT Bitcoin ETF saw nearly $1.1 billion in trading volume in the first 20 minutes after the market opened after Donald Trump prevailed in the United States presidential election on Nov. 5.
