The liquidators of the cryptocurrency exchange FTX are demanding $1.8 billion from its former competitor Binance

The liquidators of the defunct cryptocurrency exchange platform FTX have taken its former competitor, Binance, to court, demanding a little less than $1.8 billion from it, an amount received as part of a transaction that they consider illegal.

Former runner-up to Binance, FTX filed for bankruptcy in November 2022, victim of massive withdrawals from customers panicked by revelations about the management of the platform.

At the end of a five-week trial, the co-founder and main shareholder of FTX, Sam Bankman-Fried, was sentenced, in March 2024, to twenty-five years in prison for fraud and criminal conspiracy. At the time of FTX's implosion, nearly $9 billion in customer deposits had disappeared from the company's coffers, used by another company, Alameda, without investors' knowledge.

The liquidation plan was approved in early October by Federal Judge John Dorsey. He predicts that the platform's customers will recover more than what they were owed, a rarity in a procedure of this type.

The liquidators nevertheless do not intend to stop there and have referred the matter to the Delaware federal court specializing in business failures, according to a summons dated Sunday, November 10 and consulted by Agence France-Presse (AFP).

They accuse Binance of having sold to FTX the 20% that the group held in the capital of its competitor for $1.76 billion in July 2021 when the platform should already have been considered insolvent.

Sending “a false signal of strength to the market”

According to the testimony of a former Alameda executive, Caroline Ellison, who was Sam Bankman-Fried's girlfriend, approximately $1 billion in customer deposits were used to carry out this transaction, without the authorization of the interested parties. . According to the summons document, Sam Bankman-Fried wanted to buy back the stake acquired by Binance in November 2019 in order to send “a false signal of strength to the market”.

“These accusations are unfounded and we will defend ourselves with determination”reacted to AFP, a spokesperson for Binance. The liquidators accuse the founder and former boss of Binance, Changpeng Zhao, of having sought to ” destroy “ FTX, in particular through a series of tweets in November 2022, which contributed to the fall of its competitor.

Changpeng Zhao pleaded guilty to violating US money laundering laws in November 2023. As part of a deal with the US government, he agreed to resign. He was sentenced to four months in prison in April and released in September.