FTX’s legal battles are escalating as the bankrupt crypto exchange pursues lawsuits to claw back billions in lost funds. The latest move? A $1.8 billion lawsuit against Binance and its former CEO, Changpeng Zhao, over a stake sale allegedly funded with misappropriated customer deposits. Meanwhile, former Alameda Research co-CEO Sam Trabucco has settled with authorities, quietly handing over millions in assets.
FTX Sues Binance and Changpeng Zhao
FTX’s lawsuit against Binance and Zhao alleges that the 2021 sale of Binance’s 20% stake in FTX was paid for with stolen customer funds. According to FTX’s bankruptcy administrators, about $1 billion in deposits were diverted to finance the deal. Testimony from former Alameda Research CEO Caroline Ellison supports these claims, further implicating FTX’s inner circle in financial misconduct.
The lawsuit adds to Zhao’s growing legal troubles. The former Binance CEO, who stepped down in 2023 after pleading guilty to U.S. criminal charges, still owns 90% of Binance. The suit also accuses Binance of facilitating illicit activities, including money laundering, deepening the exchange’s regulatory woes.
Trabucco Cuts a Deal, Avoids Criminal Charges
While key FTX figures like Sam Bankman-Fried are facing prison time, Sam Trabucco—who co-led Alameda before resigning months before the collapse—has largely avoided the legal spotlight. Now, he’s quietly settling.
Trabucco has agreed to turn over roughly $80 million in assets to FTX debtors. That includes two luxury San Francisco apartments ($8.7 million), a 53-foot yacht ($2.51 million), and claims worth $70 million. His settlement raises questions: Was he deeply involved in Alameda’s mismanagement, or did he strategically exit before the house of cards collapsed? Either way, Trabucco has dodged the legal consequences that ensnared other FTX executives.
FTX’s Race to Recover Assets
FTX’s bankruptcy case remains one of the most complex in crypto history. Courts have ordered the exchange to repay billions to defrauded customers, including $12.7 billion in restitution and disgorgement. A recent bankruptcy ruling approved a plan to reimburse customers with accounts under $50,000 in full—though valuations are locked to pre-collapse prices.
FTX’s aggressive legal strategy suggests it isn’t done going after assets. Binance, former executives, and other industry players who dealt with FTX could find themselves next in line for lawsuits.
The Bottom Line
FTX’s downfall was one of the biggest financial implosions in recent history, and its legal fallout is far from over. The exchange is still chasing lost billions, Binance is in deeper legal trouble, and key players like Trabucco are striking deals to stay out of court. As the lawsuits pile up, one thing is clear: FTX’s collapse will haunt the crypto industry for years.
