LayerZero Settles Legal Dispute with FTX Bankruptcy Estate

LayerZero Labs has reached a settlement with the FTX bankruptcy estate, ending a two-year legal battle over transactions involving Alameda Research. The dispute stemmed from a deal where Alameda, under former CEO Caroline Ellison, agreed to sell a 5% equity stake in LayerZero back to the company. Valued at $150 million at the time, the repurchase was in exchange for forgiving a $45 million loan LayerZero had extended to Alameda. The FTX estate later sued, alleging the transactions were fraudulent, as Alameda was insolvent when the deal was made.

Another unresolved issue was Alameda’s agreement to sell 100 million Stargate (STG) tokens to LayerZero at a reduced price. However, this transaction was never completed. LayerZero’s co-founder and CEO, Bryan Pellegrino, had previously dismissed the lawsuit as baseless, stating that the company had attempted to resolve the equity matter but received no response.

With the legal battle now over, Pellegrino expressed relief, confirming that the repurchased stake was returned to the FTX estate. He emphasized that LayerZero is now focused on moving forward without legal distractions. The settlement marks a significant step for LayerZero, allowing the company to concentrate on innovation and growth.

This resolution also highlights the ongoing legal complexities surrounding FTX's collapse and the impact on firms that had financial ties to Alameda Research. As LayerZero closes this chapter, the broader crypto industry continues to navigate the fallout from FTX’s bankruptcy.