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FTX Estate Sues LayerZero Labs to Recover $86M Transferred on Eve of Bankruptcy

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Today’s Cryptocurrency Headline

The FTX estate, led by CEO John Ray III, is suing cross-chain swap protocol builder LayerZero Labs in an attempt to undo a series of deals made by former FTX executives on the eve of that company’s bankruptcy. The lawsuit primarily concerns a deal made by former Alameda Research CEO Caroline Ellison with LayerZero Labs on November 7, 2022, four days before the bankruptcy filing. As part of the deal, Alameda agreed to sell back its 5% equity stake in LayerZero — worth $150 million at LayerZero’s current valuation, the lawsuit notes — in exchange for LayerZero forgiving a $45 million loan it had extended to Alameda. The lawsuit argues that at the time of the transfers, the FTX empire was already insolvent, so the deals constitute fraud under the bankruptcy code and should be reversed for the benefit of the bankruptcy estate.

BingX’s Bitcoin Chart

Source: TradingView & BingX

As analyzed earlier, BTC continues to hover around $26,000 with little volatility, while most altcoins are experiencing significant declines. This is largely due to reduced market liquidity. Meanwhile, the circulation of USDC has once again dropped below 26 billion coins, further compressing market liquidity. The decline of altcoins is not yet over, and investors need to closely monitor the situation. The support level is at $25,600 and the resistance level is at $26,200.

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