LayerZero Labs has reached a settlement agreement with the FTX bankruptcy estate after two years of legal dispute, the company’s co-founder and CEO Bryan Pellegrino said today on social media platform X.
“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 are one of),” Pellegrino wrote.
The FTX estate sued LayerZero Labs in 2023 over a deal it made with Alameda Research CEO Caroline Ellison days before FTX filed for bankruptcy. In the deal, Alameda agreed to sell back its 5% equity stake in LayerZero, worth $150 million at the time of lawsuit, in exchange for LayerZero forgiving a $45 million loan it had extended to Alameda. The FTX estate argued in its suit that Alameda's transfers to LayerZero occurred while the company was already insolvent, rendering the transactions fraudulent and subject to reversal.
Another deal between the two involved Alameda’s agreement to sell back 100 million of its Stargate (STG) tokens to LayerZero for $10 million, where it had originally paid $25 million for. However, the transactions were never completed.
On the day the FTX estate filed its lawsuit, Pellegrino countered, saying that the entire suit was filled with “unsubstantiated claims” and arguing that LayerZero had actively sought to resolve the issue of the Alameda shares but had been ignored.
In his latest announcement, Pellegrino said that LayerZero has returned the original repurchase to the FTX estate.
“Happy to have less calls with lawyers and full focus towards building,” Pellegrino said.
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