LayerZero Labs announced the resolution of its protracted legal dispute with the FTX bankruptcy estate. The settlement, confirmed by LayerZero's co-founder and CEO Bryan Pellegrino, puts an end to a contentious two-year battle stemming from transactions made with Alameda Research just before FTX declared bankruptcy.
The controversy centered on a deal where Alameda Research, led by CEO Caroline Ellison, agreed to sell a 5% equity stake in LayerZero back to the company. This stake was valued at $150 million at the time of the lawsuit. In return, LayerZero would forgive a $45 million loan it had extended to Alameda. The FTX estate's lawsuit claimed that these transactions were fraudulent, as they were made when Alameda was insolvent.
Another point of contention was an agreement for Alameda to sell 100 million Stargate (STG) tokens back to LayerZero at a significantly reduced price compared to the original purchase, although this transaction was never finalized.
Pellegrino had previously dismissed the lawsuit as baseless, stating that LayerZero had made efforts to resolve the share issue but was met with no response.
With the latest development, Pellegrino expressed relief at the conclusion of the legal proceedings, noting that the original repurchase had been returned to the FTX estate. He emphasized the company's eagerness to move forward, focusing on building without the distraction of ongoing litigation.
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