LayerZero CEO Bryan Pellegrino Responded To FTX’s Recovery Lawsuit
- LayerZero CEO disputes FTX’s lawsuit, citing ignored efforts to resolve issues.
- FTX accuses LayerZero of fraudulent deals and is on the verge of bankruptcy.
- The legal battle centers on a high-value transaction between Alameda Research and LayerZero Labs.
LayerZero CEO Bryan Pellegrino has responded to the recent lawsuit filed by the FTX estate, emphasizing that the suit contains unsubstantiated claims.
Pellegrino made his statement on X, formerly known as Twitter, asserting that LayerZero Labs, a cross-chain protocol, had actively attempted to resolve share ownership issues with FTX‘s liquidators for nearly a year, but their efforts were consistently ignored.
He further alleged that the purpose of FTX’s lawsuit was not to address the problem but rather to prolong the legal process with the aim of accruing additional legal fees.
Pellegrino also debunked suggestions of “illegal” withdrawals, citing his personal deposits totaling millions of dollars leading up to FTX’s bankruptcy filing. He argued that withdrawals were primarily conducted for routine business purposes, such as rebalancing gas demands between L1 currencies.
The FTX estate’s lawsuit revolves around transactions involving LayerZero Labs and former FTX executives on the brink of FTX’s bankruptcy.
One major focus of the suit is a deal between Caroline Ellison, former CEO of Alameda Research, and LayerZero Labs, which took place just days before FTX filed for bankruptcy.
The deal involved the sale of Alameda’s 5% equity stake in the company, valued at $150 million, in exchange for LayerZero forgiving a $45 million loan extended to Alameda.
FTX contends that these transactions occurred when the FTX empire was already insolvent, constituting fraud under bankruptcy laws. They seek to reverse these deals for the benefit of the bankruptcy estate.
The lawsuit highlights a complex legal battle between two companies, with both parties presenting contrasting narratives regarding the events leading up to FTX’s bankruptcy.
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