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The estate of now-defunct crypto exchange FTX has filed a lawsuit against Binance<\/a> and its former CEO Changpeng Zhao in a bid to recover $1.76 billion. FTX alleges these funds were fraudulently transferred to Binance, Zhao, and other Binance executives in July 2021 as part of a shares repurchase deal with FTX co-founder Sam Bankman-Fried.<\/p>\n<\/div>\n According to the filing, the transaction saw Binance sell back the 20 percent stake it held in FTX\u2019s international unit and 18.4 percent in its US-based entity, which Bankman-Fried paid for using a mix of FTX and Binance-branded cryptocurrencies. The FTX estate alleges the share repurchase deal was conducted unlawfully because \u2014 following massive fraud by Bankman-Fried and other executives \u2014\u00a0FTX and its sister company Alameda were already insolvent at the time, and unable to fund the transaction.<\/p>\n<\/div>\n Bankman-Fried, who is serving a 25-year prison sentence, was convicted of fraud last year after using customer funds to make investments, political donations, and purchase property.<\/p>\n<\/div>\n Separately, the lawsuit says that Zhao sent \u201ca series of false, misleading, and fraudulent tweets that were maliciously calculated to destroy his rival FTX.\u201d Zhao tweeted on November 6th, 2022<\/a> that Binance was planning to liquidate $529 million worth of FTX tokens. According to the FTX estate, this \u201ctriggered a predictable avalanche of withdrawals\u201d that contributed to the collapse of the crypto exchange. <\/p>\n<\/div>\n The run on FTX ended up exposing a financial house of cards at the company, leading to criminal charges against Bankman-Fried<\/a> and others. The Securities and Exchange Commission said that the downfall of FTX was caused by Bankman-Fried\u2019s \u201cown misappropriation of customer funds,\u201d and that the operation was a fraud \u201cfrom the start.\u201d<\/p>\n<\/div>\n