The Failed Crypto Exchange FTX Is Suing Binance for $1.8 Billion

Somehow, the FTX saga still isn’t over.

The estate of the failed cryptocurrency exchange founded by Sam Bankman-Fried is now suing another crypto exchange, The Verge reported on Monday. The FTX estate is seeking to recover $1.8 billion from Binance and its former CEO Changpeng Zhao, alleging that Bankman-Fried illegally transferred the money to those entities back in July 2021.

According to court documents viewed by The Verge, Binance at one point sold back its 20 percent stake in FTX’s international arm and its 18.4 percent stake in its U.S. unit. Bankman-Fried paid for those buybacks using both FTX and Binance cryptocurrencies. The FTX estate, however, says that transaction was fraudulent because FTX would have already been insolvent at the time and unable to actually afford the transaction.

Elsewhere in the lawsuit, the FTX estate alleges that Zhao’s tweets in 2022 helped lead to the downfall of the company. A post from November 6 of that year, for example, saw Zhao saying that Binance would liquidate $529 million in FTX tokens. The FTX estate says tweets like that “triggered a predictable avalanche of withdrawals” and contributed to FTX’s collapse, according to the court documents.

“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson told Bloomberg in a statement. A representative for Zhao did not respond to the outlet’s request for comment.

This latest lawsuit is just the most recent update in the ongoing FTX drama. The crypto exchange collapsed back in November 2022, leading to criminal charges against Bankman-Fried, who had used customers’ money to pay for personal expenses. He was convicted of fraud last year and is currently serving a 25-year prison sentence, far less than the 110-year maximum he could have received.

Since falling apart, the FTX estate has been serving dozens of lawsuits in the hopes of regaining money that it owes to creditors, The Verge noted. In late 2023, for example, the company sued Bankman-Fried’s parents for millions of dollars, alleging that they had “fraudulently transferred and misappropriated funds.” And last month, the estate received approval for its plan to repay defrauded FTX customers, The Verge added—to the tune of $16 billion.

We’ll have to wait and see how this lawsuit plays out, and whether those Binance funds will be part of the eventual repayments.