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On this day in 2022, FTX filed for Chapter 11 bankruptcy.
With Sam Bankman-Fried and two of his executives in prison, we’ve made some headway since that awful November that almost destroyed crypto.
But FTX itself is still in bankruptcy proceedings, though the process is set to come to an end fairly soon… hopefully.
That’s not stopping the estate of the former exchange from going after other entities in the space, however, as we saw on Sunday when FTX filed a lawsuit against Binance and its former CEO Changpeng Zhao.
I trust that we all remember part of the sticky mess that Binance and FTX were in right before FTX was found to be insolvent and collapsed. When SBF and CZ seemingly struck a deal, only CZ and Binance pulled out, leaving the curtain to pull back and expose what happened at FTX. Good times.
Anyway, the estate in this case is arguing that a July 2021 transfer worth a whopping $1.76 billion — which would have happened well before the public had even begun sniffing around the exchange — was a “constructive fraudulent transfer.” Basically, at the time, FTX was trying to buy out CZ and Binance’s stake in the exchange.
We know now, post-SBF trial, that former Alameda CEO Caroline Ellison allegedly tried to warn off SBF from the repurchase, warning that they didn’t have the funds. And that’s part of what the estate is arguing in its 43-page suit.
In that same testimony, Ellison also alleged that Zhao sought to hurt FTX by publicly offloading his FTT — which did end up doing a lot of damage to FTX and exposed the cracks. Binance, however, ended up walking away scot-free and even claimed to gain 20% market share by the end of 2022. To be fair, Binance has had its own issues, including a multibillion-dollar lawsuit with the US government and Zhao’s brief stint in jail.
Anyway, I’m not just looking to rehash the past by bringing up the suit, so let’s talk about the other big event on the eve of the anniversary: bitcoin topping $82,000.
Unless some of you have crystal balls hidden away, I think it’s fair to say that none of us could have foreseen this level of recovery so quickly (though I know it feels like a long time for some). In just a few years, we went from wondering if FTX could end crypto as we know it to crypto becoming a prominent industry.
Take that, SBF.