Bankrupt cryptocurrency exchange FTX has filed a legal complaint against competitor Binance and the former CEO, Changpeng Zhao, for what is claimed to be a dishonest repurchase of shares by FTX’s previous CEO, Sam Bankman-Fried.
Reportedly, Bankman-Fried used FTX’s own token, FTT, and Binance-issued coins BNB and BUSD, worth approximately $1.76 billion at the time, to purchase Binance’s stake in FTX in July 2021.
However, it has been alleged that Bankman-Fried’s trading firm, Alameda Research, was already insolvent at the time, and FTX’s second-in-command, Caroline Ellison, had warned that they would need to borrow from FTX to fund the purchase.
According to court documents, FTX was also insolvent at the time and the FTT tokens had no real value, making the transaction fraudulent.
