Alameda Research sues Waves founder to recover 90M Dollars
In an effort to recover at least $90 million, Alameda Research, the trading arm of the bankrupt cryptocurrency exchange FTX, has sued Waves' founder, Aleksandr Ivanov, and its affiliated companies as part of its legal strategy to recover cryptocurrency assets.
Alameda stated in a filing on November 11 that it is seeking the return of $90 million in digital assets that are owned by both Alameda and the debtors in the FTX bankruptcy case. The assets were previously deposited with Vires.Finance, a liquidity platform that runs on Waves.
According to the filing, Alameda deposited roughly $80 million USDT and USDC coin on the Waves-based decentralized liquidity protocol, Vires.Finance in March 2022, which had allegedly been converted into roughly $90 million USDN. In order to earn rewards, or interests, and acquire governance rights in the Vires DAO, users were encouraged to deposit assets onto Vires using the Waves blockchain.
Alameda claimed that although Ivanov promoted Waves and Vires as opportunities for lenders and other users to profit greatly, he actually orchestrated a number of transactions that artificially raised the value of WAVES while embezzling money from Vires.
While Ivanov "agreed to join only one call with the debtors in January 2023," Alameda pointed out that the debtors have "repeatedly attempted to regain custody of their frozen assets." The filing claimed that Ivanov has since disregarded all additional communications from the debtors.
FTX claw-back litigation
The FTX estate has brought more than 20 lawsuits against different organizations in the last few days in an effort to recover funds for creditors. The developers of the game Storybook Brawl, Deltec Bank chairman Jean Chalopin, and Anthony Scaramucci, the CEO of SkyBridge Capital and a former official in the Trump administration, are among the noteworthy people.
The process through which a bankrupt entity tries to "claw-back," or retrieve, funds or property that it has paid to a creditor is known as claw-back. Either fraudulent transfers or preference claims are two ways a bankrupt entity can accomplish that.
According to an article by Morris James, in order to prevent such preferential or fraudulent transfers, the bankrupt entity—in this case, FTX or any of its affiliates—petitioned the court to order the return of the funds. Preferential transfers are made to "insiders," like family members or business associates, during the 90 days before bankruptcy.
A transfer that is made for less than the property's value or with the deliberate intent to defraud creditors is considered fraudulent. The bankrupt entity increases the amount available to pay unsecured creditors or improves its financial position when clawback litigation is successful.
FTX bankruptcy
On November 11, 2022, FTX declared bankruptcy, resulting in losses for its investors and users totaling more than $8.9 billion. One of the worst periods in the history of cryptocurrency was the time following the demise of the FTX exchange and its 130 subsidiaries.
On December 12, 2022, Bankman-Fried was taken into custody in the Bahamas following the filing of criminal charges by U.S. prosecutors. In January 2023, he was extradited to the United States. On March 28, Bankman-Fried received a sentence of 25 years in federal prison.
Whalesinsider News reported on June 17 that Binance, one of the world’s leading cryptocurrency exchanges, has delisted Waves from its platform.
As of this writing, Waves' price was $1.16, down 2.69% over the previous day, according to CoinMarketCap.
Disclaimer
This information should not be considered financial advice by any means. Please do your own research before making any investment decisions. The views in the articles are personal opinions only. Whale Insider is not responsible for any financial losses incurred.