LayerZero CEO settles $21 million lawsuit with FTX estate over 2022 transactions
LayerZero CEO settles $21 million lawsuit with FTX estate over 2022 transactions
LayerZero Labs has reached a settlement with the FTX estate over funds allegedly withdrawn before the exchange’s collapse in 2022 and an equity stake in the crosschain protocol.
Key Takeaways
- LayerZero settled with the FTX estate over $21M in disputed funds and an equity stake.
- The lawsuit stemmed from a 2022 deal with Alameda Ventures, which bought a 5% stake in LayerZero.
- FTX’s estate continues efforts to recover lost funds, with its reorganization plan now in effect.
- Former FTX CEO Sam Bankman-Fried is appealing his 25-year prison sentence.
The estate had sought over $21 million from LayerZero, which CEO Bryan Pellegrino said led to “millions in legal fees” and two years of litigation. As part of the settlement, LayerZero returned its previously repurchased stake to the FTX estate.
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In 2022, Alameda Ventures, a venture capital arm of Alameda Research, acquired a 5% stake in LayerZero, transferring $70 million and purchasing $25 million worth of STG tokens. Amid FTX’s bankruptcy, LayerZero attempted to repurchase its stake by forgiving a $45-million loan, but the FTX estate later sued, alleging the deal was exploitative during FTX’s liquidity crisis.
LayerZero price. Source: CoinGecko.
FTX estate continues recovery efforts
estate has been actively pursuing lawsuits to recover funds lost during the exchange’s downfall. Some cases remain unresolved, but its reorganization plan took effect on Jan. 3, allowing creditors with claims under $50,000 to receive repayments within 60 days.
Meanwhile, all criminal cases tied to FTX have concluded. Former CEO Sam Bankman-Fried, serving a 25-year sentence, is appealing his conviction, while other executives, including Caroline Ellison and Ryan Salame, are also serving time.
