FTX files lawsuit against Binance and its former chief executive seeking $1.8bn

FTX filed a lawsuit against Binance Holdings and its former chief executive Changpeng Zhao, seeking to claw back almost $1.8 billion it alleges was fraudulently transferred by Sam Bankman-Fried.

Binance, Zhao and other Binance executives received the funds as part of a July 2021 share repurchase deal with Mr Bankman-Fried, the FTX co-founder, who is now in prison. In that transaction, they sold stakes of about 20 per cent in FTX’s international unit and 18.4 per cent in its US-based entity, according to a legal filing from the FTX estate on Sunday.

Mr Bankman-Fried paid for the stock repurchase using a mix of FTX’s exchange token FTT and Binance-branded coins BNB and BUSD valued at $1.76 billion at the time, according to the filing.

FTX and its sister trading house Alameda Research “may have been insolvent from inception and certainly were balance-sheet insolvent by early 2021”, the estate said in the filing. As a result, the share repurchase deal was made fraudulently, it alleged.

FTX also accused Mr Zhao of posting a series of “false, misleading, and fraudulent tweets” shortly before FTX’s collapse, the content of which was “maliciously calculated to destroy his rival”. A November 6, 2022 tweet by Mr Zhao stated that Binance intended to sell its FTT tokens, worth some $529 million at the time, causing withdrawals from the exchange to skyrocket.

“The claims are meritless, and we will vigorously defend ourselves,” a Binance spokesperson said on Monday. A representative for Mr Zhao didn’t immediately reply to an emailed request for comment.

Sam Bankman-Fried sentenced to 25 years in prison

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The lawsuit is one of many filed by FTX in the bankruptcy court of Delaware; other defendants include former White House communications officer Anthony Scaramucci, digital asset exchange Crypto.com and political groups such as the Mark Zuckerberg-founded FWD.us, court documents show.

“In 2021 and 2022, FWD.us was one of several organisations that received funding from a non-profit organisation run by a family member of Sam Bankman-Fried to work on improving the family-based and employment-based immigration systems and enhancing American competitiveness,” an official for FWD.us said.

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How to watch Ireland v Pakistan in UAE

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FINAL RESULT

Sharjah Wanderers 20 Dubai Tigers 25 (After extra-time)

Wanderers
Tries: Gormley, Penalty
cons: Flaherty
Pens: Flaherty 2

Tigers
Tries: O’Donnell, Gibbons, Kelly
Cons: Caldwell 2
Pens: Caldwell, Cross

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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ONCE UPON A TIME IN GAZA

Starring: Nader Abd Alhay, Majd Eid, Ramzi Maqdisi

Directors: Tarzan and Arab Nasser

Rating: 4.5/5