LONDON - Collapsed cryptocurrency company FTX is suing Binance and its former chief executive Zhao Changpeng, alleging that US$1.8 billion (S$2.4 billion) was “fraudulently transferred” by FTX management to Binance and its executives.

The lawsuit relates to Binance’s sale of its stake in Sam Bankman-Fried’s FTX, which it acquired in 2019 but then negotiated to sell back to FTX in July 2021.

According to the lawsuit, FTX’s Alameda Research division directly funded the share repurchase using tokens, which had a fair market value of US$1.76 billion then. Alameda, the lawsuit alleges, was insolvent at the time of buying the shares and could not therefore afford to fund the transaction, and it should not have been allowed to proceed.