In a recent court filing, the FTX Debtors claim that LayerZero took advantage of Alameda Research’s financial difficulties before the bankruptcy.
The filing states that LayerZero admitted to exploiting Alameda Ventures in a letter to its investors. According to a recent court filing by FTX, LayerZero attempted to benefit from the financial troubles of FTX’s sister company by initiating a loan recall for a multi-million dollar debt. The debtors allege that LayerZero was aware of Alameda Research’s financial difficulties and used the opportunity to negotiate a favorable deal for themselves.
LayerZero demanded immediate repayment of its $45 million loan to Alameda Research in an attempt to capitalize on their distressed financial position.
LayerZero allegedly negotiated a quick sale with Caroline Ellison, the CEO of Alameda Research, where Alameda transferred its equity stake in LayerZero in exchange for the forgiveness of the loan. The filing reveals that LayerZero obtained a significantly more favorable agreement, forgiving the loan and receiving equity worth nearly $150 million.
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