FTX sues LayerZero, seeking to undo a $45 million deal struck before its bankruptcy

Odaily Planet Daily News FTX is suing LayerZero Labs, trying to undo the $45 million deal reached by the two parties on the eve of the company's collapse. The lawsuit primarily involves a deal struck by former Alameda Research CEO Caroline Ellison with LayerZero Labs on November 7, 2022, four days before filing for bankruptcy protection. As part of the deal, Alameda agreed to sell its 5% stake in LayerZero (worth $150 million at LayerZero's current valuation) in exchange for LayerZero waiving a $45 million loan to Alameda. The lawsuit alleges that at the time of the transactions, FTX was already insolvent and therefore the transactions constituted fraud under bankruptcy law and were reversed for the benefit of the bankrupt company's estate. (The Block) It was reported yesterday that, according to a lawsuit document, FTX has filed a recovery lawsuit against LayerZero Labs and other related parties. Allegedly, just before FTX shut down and banned withdrawals, LayerZero used inside information to illegally withdraw $21.37 million in funds from FTX. In addition, FTX also seeks to recover approximately US$13.07 million and US$6.65 million from Ari Litan, the former chief operating officer of LayerZero Labs, and its Skip & Goose subsidiary.