Bankman-Fried paid for the stock repurchase using a mix of FTX’s exchange token FTT and Binance-branded coins BNB and BUSD valued at US$1.76 billion at the time, according to the filing.
FTX and its sister trading house Alameda Research “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021”, the estate said in the filing. As a result, the share repurchase deal was made fraudulently, it alleged.
FTX also accused Zhao of posting a series of “false, misleading, and fraudulent tweets” shortly before FTX’s collapse, the content of which was “maliciously calculated to destroy his rival”.
A Nov 6, 2022 tweet by Zhao stated that Binance intended to sell its FTT tokens, worth some US$529 million at the time, causing withdrawals from the exchange to skyrocket.
“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson said in a statement on Monday. A representative for Zhao didn’t immediately reply to an e-mailed request for comment
The lawsuit is one of many filed by FTX in the bankruptcy court of Delaware; other defendants include former White House communications officer Anthony Scaramucci, digital asset exchange Crypto.com and political groups, such as the Mark Zuckerberg-founded FWD.us, court documents show.
“In 2021 and 2022, FWD.us was one of several organisations that received funding from a non-profit organisation run by a family member of Sam Bankman-Fried to work on improving the family-based and employment-based immigration systems and enhancing American competitiveness,” a spokesperson for FWD.us said in an emailed statement.
