FTX Sues LayerZero Labs, Seeks to Recover Over $21 Million Displaced Before Bankruptcy

FTX demands the cancellation of the agreements reached days before its collapse, as well as the restitution of millions transferred to LayerZero Labs and its subsidiaries.< /p> News Join us on social media

Bankrupt crypto exchange FTX has filed a lawsuit against cross-chain protocol LayerZero Labs, seeking to recover $21 million in funds allegedly illegally withdrawn before FTX shut down in November 2022, according to reports. court documents filed September 9.

The case dates back to transactions made from January to May 2022 between Alameda Ventures — the venture capital arm of FTX sister company Alameda Research — and LayerZero.

According to the court filing, Alameda Ventures paid more than $70 million in two transactions to acquire an approximately 4.92% stake in LayerZero. Additionally, in March, Alameda Ventures paid an additional $25 million for 100 million STG tokens in a public auction, which will be distributed over a six-month period beginning in March 2023.

Super excited to work with @LayerZero_Labs!

They build a key missing element of crypto infrastructure: cross-chain liquidity.

And more importantly, they do a great job creating great products. https://t.co/TvEC6sfpeE

Amid these transactions, in February, LayerZero loaned $45 million to Alameda Ventures' parent company, Alameda Research, under a promissory note carrying an 8% annual interest rate.

When the FTX crisis broke out in early November, LayerZero sought an agreement for the return of its stake held by Alameda. The agreement provided for the return of shares to LayerZero i...