Binance and its former CEO Zhao are being sued by FTX for $1.8 billion.

• FTX, in a Sunday filing with a Delaware court, mentioned a 2021 transaction where Binance, Zhao, and others sold a 20% stake in the platform and a 18.4% stake in its U.S.-based entity West Realm Shires back to the company.
• "The suit alleges that Alameda was unable to fund the share repurchase at the time of the transaction and therefore committed constructive fraudulent transfer."
• A Binance spokesperson emailed CNBC, stating that the claims are baseless and they will strongly defend themselves.

FTX's estate has filed a lawsuit against Binance and Changpeng Zhao, alleging fraud in a share deal worth at least $1.76 billion.

FTX, in a Sunday filing with a Delaware court, mentioned a 2021 transaction where Binance, Zhao, and others sold a 20% stake in the platform and a 18.4% stake in its U.S.-based entity West Realm Shires back to the company.

The FTX estate claims that the share repurchase was funded by FTX's Alameda Research division using a combination of FTX and Binance exchange tokens, as well as Binance's dollar-pegged stablecoin.

"The suit alleges that Alameda was unable to fund the share repurchase at the time due to insolvency, and therefore, the deal with FTX co-founder Sam Bankman-Fried, who is currently serving a 25-year sentence for fraud linked to the collapse of his exchange, was a "constructive fraudulent transfer.""

Binance refutes the accusations, asserting in an email statement: "The allegations are baseless, and we will fiercely defend ourselves."

The collapse of FTX has led to an increase in tensions between two prominent figures in the crypto industry, resulting in litigation.

FTX, once a $32-billion empire, collapsed into bankruptcy due to a surge of customer withdrawals, causing a drop in the crypto markets.

In November 2020, both Bankman-Fried and Zhao were found guilty of criminal charges related to their respective exchanges. Bankman-Fried was charged with seven counts of fraud for the bankruptcy of FTX and the theft of customer funds, while Zhao pleaded guilty to violating the Bank Secrecy Act for failing to implement an effective anti-money laundering program and for breaching U.S. economic sanctions.

The lawsuit against Zhao also alleges that he made a series of false, misleading, and fraudulent tweets that caused a predictable avalanche of withdrawals at FTX, leading to the exchange's collapse.

According to the suit, Zhao made a statement on Nov. 6 on X about FTX token FTT, saying, "Liquidating our FTT is just post-exit risk management, learning from LUNA. We gave support before, but we won't pretend to make love after divorce."

In light of recent revelations, we have decided to liquidate any remaining FTT on our books.