Bryan Pellegrino, the co-founder and chief executive of LayerZero Labs, recently called out the bankruptcy estate of FTX for prolonging its settlement process. The liquidators and the estate are responsible for the liquidation of FTX and have been involved with sorting out the remains of the defunct crypto exchange since its crash last year.
Pellegrino took to X (formerly Twitter) earlier today to respond to the lawsuit filed by FTX’s bankruptcy estate:
The lawsuit, which was filed on September 10, 2023, sought to reverse a series of transactions that FTX and Alameda Research had entered into with LayerZero Labs in the days leading up to the exchange’s insolvency. The LayerZero Labs executive alleged that the complaint consisted of largely unsubstantiated claims by the liquidators.
These transactions included a 5% stake in LayerZero Labs (worth $150 million) that was returned by Alameda Research to get a $45 million debt forgiven. As part of the deal, Alameda also agreed to the sale of 100 million Stargate tokens (STG) in exchange for $10 million, though this transaction was never concluded.
According to Pellegrino, FTX liquidators have ignored LayerZero Labs’ attempts to sort out the matter involving the ownership of the above-mentioned stake. However, the liquidators have allegedly ignored these requests for nearly a year, and have instead filed a lawsuit filled with unsubstantiated claims.
The LayerZero CEO alleged that the latest lawsuit was an attempt by the liquidators to prolong the settlement process in an effort to extract more legal fees. He added, “It’s disappointing to see the estate resort to mudslinging, we look forward to settling the issue in court”.
Pellegrino also highlighted the questionable accounting methods followed at FTX under its founder and former CEO Sam Bankman-Fried. In what Pellegrino described as an outrageous and gross method, the crypto exchange allegedly presented its monthly trading volume as part of the funds owed to it.
