After a battle that lasted two years, the LayerZero Labs company which owns a protocol for omnichain interoperability is finally settled with the FTX estate. LayerZero CEO Bryan Pellegrino shared the news with investors and the general public, being relieved that the lawsuit is behind.
After more than two long years and millions in legal fees (lawyers always win) we have reached a settlement agreement with the FTX estate. 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…
— Bryan Pellegrino (臭企鹅) (@PrimordialAA) January 31, 2025
LayerZero landed in a legal dispute when FTX’s bankruptcy estate sued it to claw back over $86 million in transactions that occurred prior to FTX collapsing. It concerned a deal between a trading firm, Alameda Research, known to be associated with FTX. In this deal, LayerZero had written off $45 million on a loan to Alameda in exchange for 5% equity that was later sold back to LayerZero. Alameda relied on these loans to cover its losses, as FTX maintained the trades were fraudulent.
Bryan Pellegrino, dismissed the lawsuit as baseless, defending that LayerZero had only tried to work through the issue, but got no response from FTX. At LayerZero, they ultimately decided to settle, to stop from having to spend any more money on legal fees, and to invest in its core operation—building its platform. As part of that settlement, the repurchase amount was returned to the FTX estate by LayerZero.
This resolution has proven legal and served as a positive for LayerZero’s native token, ZRO. Following announcements, the ZRO price increased by 11% to $2.50 and then spiked by 8% to $3.86. While there has been a slight decrease in trading volume, open interest of ZRO futures is increasing, suggesting that investors are taking a more likely stance on the token’s future after the lawsuit has been settled.
Pellegrino also announced in his statement that LayerZero is financially strong and remains that way with $107 million in cash on hand and on-chain funds, with a strong runway even in harsh market conditions.
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