Cryptocurrency

LayerZero

Cryptocurrency exchange FTX has initiated legal proceedings against LayerZero Labs, a cross-chain protocol, in an attempt to recover $21 million in funds that FTX claims were illicitly withdrawn prior to its closure in November.   
The dispute revolves around a series of transactions conducted between Alameda Ventures and LayerZero earlier in the year.   
Alameda Ventures, the venture capital arm of Alameda Research and a sister company to FTX, engaged in transactions with LayerZero from January to May 2022.   
<a href="https://x.com/PrimordialAA/status/1701049609953464433?s=20" rel="noopener noreferrer nofollow">https://x.com/PrimordialAA/status/1701049609953464433?s=20</a>   
These transactions included payments exceeding $70 million to acquire a 4.92% stake in LayerZero. Additionally, Alameda Ventures paid $25 million for 100 million STG tokens in a public auction held in March. These tokens were set to be distributed over six months, starting in March 2023.   
During these transactions, LayerZero extended a loan of $45 million to Alameda Ventures' parent company, Alameda Research, with an 8% annual interest rate.   
FTX alleges that LayerZero took advantage of Alameda Ventures during a liquidity crisis. FTX's lawsuit seeks to nullify the agreement and recover funds that were withdrawn just before FTX filed for bankruptcy.   
This includes approximately $21.37 million from LayerZero Labs, $13.07 million from former COO Ari Litan, and $6.65 million from the subsidiary Skip &amp; Goose.   
In response to the lawsuit, LayerZero's CEO, Bryan Pellegrino, has stated that the claims in the lawsuit are unfounded.   
He mentioned that they have been in ongoing communication with FTX liquidators for nearly a year regarding shared ownership concerns, but have received no response.   
Pellegrino disputes allegations of having preferential information about withdrawals and highlights that significant deposits were made near FTX's bankruptcy.   
He clarifies that most withdrawals were for standard business purposes, including managing gas demands, rather than panic-driven actions based on insider information.   
Pellegrino expressed disappointment in the resort to legal action and indicated a willingness to resolve the matter in court.   
FTX has been in the spotlight recently due to speculation about the liquidation of its recovered crypto assets in the coming week. These assets primarily consist of SOL, ETH, and BTC.   
<a href="https://x.com/TheDeFinvestor/status/1700824279636382007?s=20" rel="noopener noreferrer nofollow">https://x.com/TheDeFinvestor/status/1700824279636382007?s=20</a>   
Despite initial concerns, experts believe that the liquidation may not have a significant impact on these currencies. The legal battle with LayerZero adds to the challenges FTX is currently facing as it navigates its financial situation.  
The post <a rel="noopener noreferrer nofollow" href="https://optimisus.com/news/crypto-news/ftx-sues-layerzero-for-alleged-unauthorized-fund-withdrawals/">FTX Sues LayerZero for Alleged Unauthorized Fund Withdrawals</a> appeared first on <a rel="noopener noreferrer nofollow" href="https://optimisus.com">Optimisus</a>.

FTX Sues LayerZero for Alleged Unauthorized Fund Withdrawals

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