FTX, the collapsed cryptocurrency has recently sued LayerZero to reclaim the funds worth $21 million which were transferred before going bankrupt. Before FTX collapsed, it made contracts with LayerZero and its affiliated platform as part of the expansion. Now, FTX is determined to cancel all those contracts, reclaim the funds for its utilization, and cope with legalities.
FTX’s Prior Contracts Before Going Bankrupt
Defunct cryptocurrency exchange, FTX has now filed a case against a prominent on-chain platform LayerZero Labs. FTX claims that LayerZero allegedly withdrew crypto funds worth $21 million before FTX went bankrupt. FTX sued LayerZero to reclaim those funds as the funds were drawn illegally before FTX shut down in November 2022.
The case is based on the transactions made between the sister company of FTX named Alameda Ventures (the extension of Alameda Research) and the on-chain protocol named LayerZero. On September 09, 2022, Alameda Ventures paid $70 million to gain a stake of roughly 4.92%. Afterwards, it also paid $25 million in an auction to acquire 100M STG tokens to be distributed from March 2023 for six months.
FTX to Cancel the Contracts and Reclaim $21 Million
During such transactions, LayerZero also loaned the amount of $45M to Alameda Research under the condition of an 8% annual interest rate. But when FTX went bankrupt, the same LayerZero protocol asked for the deal to return the sake owned by the parent company, Alameda Research.
The agreement eased the loan of $45 million in case of the return of the asked shares. Moreover, the purchase deal of 100 million STG Tokens should also be paused and stepped back at the discount of $10 million. However, the above deal couldn’t be completed as LayerZero didn’t pay the price and Alameda Ventures didn’t transfer the tokes. Amid such transactions, FTX sued LayerZero to reclaim the funds worth $21M which LayerZero illegally withdrew before FTX went bankrupt.
Tidex.com – A Detailed Review of Tidex Cryptocurrency Exchange
Coinbase Revolutionizes Money Transfers with Social Media Integration
Robinhood Claims 75% Surge in Crypto Trading During November 2023
You have not selected any currencies to display