LayerZero Settles Legal Dispute with FTX Bankruptcy Estate

• Settlement Terms: LayerZero returned a 5% stake to FTX’s bankruptcy estate to resolve legal disputes and avoid further litigation.
• Disputed Transactions: FTX’s estate argued the stake was worth $150M, and also cited an uncompleted $10M Stargate (STG) token sale.
• Industry Impact: The resolution highlights ongoing efforts to recover FTX assets and the broader impact of its collapse on crypto entities.

The LayerZero company has settled its disputes with FTX’s bankruptcy estate to end its protracted legal dispute. Bryan Pellegrino as CEO, declared that the settlement enables LayerZero to concentrate on its operations without legal obstructions.

Legal Dispute Between LayerZero and FTX Ends

The formation of the agreement happened in 2022 between LayerZero and Alameda Research before FTX filed for bankruptcy. LayerZero accepted a 5 percent ownership interest from Alameda Research in exchange for dissolving a $45 million debt through this agreement. The bankruptcy estate of FTX initiated legal action against this transfer because it allegedly occurred when the company was deeply troubled financially.

FTX’s bankruptcy estate argued that the 5% stake held a market value of $150 million when the deal occurred. The lawsuit also referenced an uncompleted transaction where Alameda was set to sell 100 million Stargate (STG) tokens to LayerZero for $10 million.

Settlement Terms Include Share Return

Upon facing the lawsuit, Pellegrino dismissed the claims as baseless. However, to expedite resolution and prevent further legal entanglements, LayerZero agreed to return the 5% stake to the FTX bankruptcy estate. Pellegrino emphasized that settling the case would allow the company to prioritize its core business activities.

FTX’s bankruptcy has disrupted multiple cryptocurrency entities, with ongoing legal proceedings affecting various stakeholders. The resolution of the dispute involving LayerZero marks a significant development within the broader restructuring process. The settlement ensures that FTX’s creditors receive additional assets as part of the estate’s recovery efforts.

The conclusion of this legal case reflects the continuing impact of FTX’s collapse on the digital asset industry. The settlement reinforces the efforts to recover funds and streamline proceedings for affected creditors. With the legal battle now resolved, LayerZero can focus on further advancing its blockchain initiatives without ongoing litigation concerns.