LayerZero and FTX Estate Finalize Settlement Over Alameda Deal

Highlights:

• LayerZero and FTX Estate reached a settlement after two years of legal battles over a disputed transaction.
• The dispute involved a $45 million loan forgiveness deal between LayerZero and Alameda Research before FTX’s collapse.
• LayerZero repurchased FTX’s shares and settled all agreements, ending the legal dispute with the estate.

After the two year legal dispute, LayerZero has reached a settlement with the FTX Estate. That lawsuit was related to a transaction made by Alameda Research just before FTX collapsed. The agreement was confirmed by LayerZero’s CEO Bryan Pellegrino, who said that the resolution enables the company to focus on its future operations.

After more than two long years and millions in legal fees (lawyers always win) we have reached a settlement agreement with the FTX estate. Ultimately we decided this was not us vs FTX which is a fight we feel completely justified in, but it was us vs the creditors (which also we…

— Bryan Pellegrino (臭企鹅) (@PrimordialAA) January 31, 2025

Legal Battle Between LayerZero and FTX Estate

LayerZero was sued by the FTX Estate in 2023 to reverse a deal made with Alameda Research in 2022. Alameda sold its 5% LayerZero stake worth $150 million to forgive a $45 million loan, the lawsuit said. According to the FTX Estate, the transaction happened when Alameda was insolvent, making it subject to being reversed under bankruptcy laws.

Another part of the dispute centered on that Alameda agreed to sell 100 million Stargate (STG) tokens back to LayerZero for $10 million. The tokens were originally bought by Alameda for $25 million. However, the deal was never finalized. The FTX Estate additionally attempted to reclaim $21.3 million in cryptocurrency deposits LayerZero drained before FTX’s bankruptcy filing.

Pellegrino had dismissed the lawsuit as baseless. LayerZero had tried to resolve the issue, but it was ignored, he insisted. Although LayerZero was engaged in a legal battle, it continued to operate and was financially strong.

Regarding the FTX suit, the entire suit is filled with unsubstantiated claims. We have been in communication with the FTX liquidators for almost a year now and have time and time again attempted to proactively address the issue of ownership of the shares with them and have been…

— Bryan Pellegrino (臭企鹅) (@PrimordialAA) September 11, 2023

Settlement and Financial Standing of LayerZero

The settlement ended disputes between LayerZero and FTX Estate. According to Pellegrino, the company repurchased FTX, FTX Ventures, and all of Alameda’s equity positions, token warrants, and agreements. LayerZero also returned the original repurchase to the estate.

Despite legal proceedings, LayerZero remained in a strong financial position. The company holds $107 million in direct cash deposits and $27 million in onchain funds, mostly in stablecoins. Furthermore, it also has $11.5 million in assets still locked on FTX that Pellegrino considers unrecoverable.

As part of the agreement, LayerZero acquired locked STG tokens from an earlier Alameda auction. The company proposed transferring the tokens to the Stargate Foundation so that the community could decide on their use. According to Pellegrino, the resolution frees LayerZero to concentrate on growth without legal complications.

FTX Founder Sam Bankman-Fried’s Parents Seek Trump Pardon

Sam Bankman Fried’s parents are trying to secure a presidential pardon for their son. Bloomberg reported that Trump’s allies have been in talks on the matter with Joseph Bankman and Barbara Fried, Stanford Law professors. They argued that the FTX customers got their money back and that his sentence of 25 years was too harsh.

SBF's Parents Reportedly Exploring Ways To Secure Trump Pardon For 25-Year Sentence

SBF's parents, Stanford law professors Joseph Bankman and Barbara Fried, are reportedly exploring ways to secure a pardon for their son from President Trump.

There is no confirmation of direct… pic.twitter.com/qUP9zchlBH

— The Wolf Of All Streets (@scottmelker) January 31, 2025

Recently, Trump pardoned Silk Road’s Ross Ulbricht, which gave some hope to Bankman-Fried’s case. Unlike Ulbricht, however, he has no widespread public support. It’s not clear if his parents have reached out to the White House. The collapse of FTX erased $8 billion,n but bankruptcy filings claimed assets as high as $16 billion could be recovered.