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LayerZero (ZRO) has announced its settlement with FTX’s bankruptcy proceedings, following a protracted legal struggle. CEO Bryan Pellegrino confirmed that the process is now over, allowing the team to concentrate on advancing their projects.
Two-Year Legal Battle with FTX Ends
In 2022, prior to FTX’s bankruptcy filing, LayerZero had reached an agreement with Alameda Research. Under this agreement, Alameda returned its 5% stake in LayerZero in exchange for the cancellation of a $45 million debt owed to LayerZero. However, FTX’s bankruptcy estate filed a lawsuit against LayerZero, claiming this transaction occurred during Alameda’s financial collapse.
FTX argued that at the time of the lawsuit, the shares LayerZero received were worth $150 million, and the deal took place during a financial crisis. Additionally, a separate deal involving Alameda selling 100 million Stargate (STG) coins to LayerZero for $10 million, which was not completed, was also included in the lawsuit.
LayerZero Returns Shares to Reach Settlement
On the day the lawsuit was filed, Pellegrino described FTX’s claims as “baseless.” However, to avoid a lengthy legal process, LayerZero decided to return the shares it had reclaimed from Alameda to the FTX bankruptcy estate. Pellegrino expressed relief that the process was finally completed, allowing them to focus on their core business without legal distractions.
The FTX bankruptcy has significantly impacted many cryptocurrency companies, directly and indirectly. This legal battle involving LayerZero has resonated throughout the cryptocurrency market. The settlement is viewed as a step towards minimizing losses for FTX’s creditors.
