LayerZero has settled with the defunct crypto exchange FTX, confirmed the chief executive Bryan Pellegrino.
By Parth Dubey
Edited by Julia Sakovich
Updated
3 mins read
Bryan Pellegrino, the chief executive of the omnichain interoperability protocol LayerZero, has announced a settlement with the FTX estate. The settlement was reached after two years of intense negotiations and millions spent on legal fees, confirmed Pellegrino. He added that his firm decided to settle because it was the best course of action and fighting a legal battle “was not us.”
In a post on X (formerly Twitter), the LayerZero chief executive announced that the “original repurchase has been returned to the estate”, while highlighting that he is “happy to have less calls with lawyers and full focus towards building”. Pellegrino also sent out a memo to the investors in LayerZero Labs, stating:
“We’ve worked around the clock for the past 72 hours to structure an agreement and have bought FTX/FTX Ventures/Alameda out of 100% of their equity position, token warrants, and any and all agreements between us.”
FTX filed a lawsuit against LayerZero because the latter withdrew more than $21.3 million in cryptocurrency deposits made in 2022. The exchange wants to claw back these funds, but Pellegrino stated in 2023 that FTX’s claims were “unsubstantiated.” It is important to note that the withdrawal took place in the 90 days leading up to the exchange’s collapse.
The transaction includes substantial amounts of APT APT $4.80 24h volatility: 4.6% Market cap: $2.91 B Vol. 24h: $108.06 M , AVAX AVAX $19.12 24h volatility: 5.0% Market cap: $7.95 B Vol. 24h: $343.62 M , BNB BNB $588.6 24h volatility: 2.0% Market cap: $85.89 B Vol. 24h: $599.00 M , BUSD, FTM, MATIC MATIC $0.18 24h volatility: 1.0% Market cap: $321.29 M Vol. 24h: $1.24 M , USDC USDC $1.00 24h volatility: 0.0% Market cap: $60.07 B Vol. 24h: $12.17 B , and USDT USDT $1.00 24h volatility: 0.0% Market cap: $144.28 B Vol. 24h: $33.73 B . Court filings unveiled that FTX also wanted to claim $13.07 million from Ari Litan, the former chief executive at LayerZero, and $6.65 million from subsidiary Skip & Goose.
LayerZero has also purchased the locked STG tokens from the community auction that FTX’s sister firm Alameda Research had. The firm is “putting up a proposal to transfer these to the Stargate Foundation pari passu and let the community decide what to do with them,” read the memo while revealing that LayerZero has a staggering $107 million in direct cash deposits along with $27 million in on-chain funds. 90% of these funds are in stablecoins.
The firm also has an additional $11.5 million that was on FTX that was used operationally. However, “for the sake of sanity”, Pellegrino considers it $0, ignoring the fact that some amount on the dollar is likely recoverable.
The meme stated that LayerZero has seven years of runway even in the most aggressive of expenditures while taking the firm ahead of its competitors, who are “cash-strapped, scared, and questioning the future of the industry.”
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A crypto journalist with over 5 years of experience in the industry, Parth has worked with major media outlets in the crypto and finance world, gathering experience and expertise in the space after surviving bear and bull markets over the years. Parth is also an author of 4 self-published books.
