Over the past year, FTX has filed numerous lawsuits against previous business partners, attempting to claw back funds allegedly spent without justification or in subprime deals.

Often, these funds were indeed spent on a whim, whether at networking parties or, presumably, gaming. However, LayerZero’s CEO Bryan Pellegrino argued that this could not be farther from the truth in this case.

Multimillion-Dollar Lawsuit

In the lawsuit filed on the 8th of September, FTX’s new leadership argues that the deals the firm made with LayerZero shortly before its collapse were unfair to it since the exchange was already insolvent at the time.
However, the deals in question were made before the company officially filed for bankruptcy on the 7th of November, 2022.

According to FTX’s lawyers, Alameda CEO Caroline Ellison traded the FTX Empire’s 5% stake in LayerZero – worth $150 million at present valuation – in exchange for loan forgiveness regarding LayerZero’s $45 million loan to Alameda. Since the FTX Group was already insolvent, the platform’s lawyers argue that this could even be considered fraud.

At the time, bankruptcy had not yet been declared, begging the question of just how much LayerZero was supposed to know about FTX’s situation.

The rest of the sum mentioned in the lawsuit is made up of $21 million withdrawn from LayerZero’s FTX account – of which $16 million was withdrawn before FTX even began to display signs of being unstable – and the money paid for 100 million Stargate (STG) tokens.

These tokens had been sold to FTX for $25 million earlier that year. In an effort to settle its deals with other platforms and avoid a total collapse, Alameda sold these tokens back to LayerZero for $10 million.

LayerZero CEO Lashes Out At FTX

Shortly after the lawsuit was filed, Bryan Pellegrino took to X to give his firm’s side of the story.

Regarding the FTX suit, the entire suit is filled with unsubstantiated claims. We have been in communication with th