Alameda Research, the now-defunct trading arm of formerly-largest cryptocurrency exchange FTX, has used legal action against Waves blockchain founder Sasha Ivanov. Consequently, this lawsuit been initiated on November 10th, 2024 to recoup over around $90 million of digital assets that were fraudulently misappropriated via Vires. Waves Exchange: Waves based Decentralized exchange | finance.
Background of the Case
Vires saw stablecoin deposits of about $80 million from Alameda Research in USDT and USD Coin (USDC) back in March 2022. Finance. Those assets were allegedly converted into an algorithmic stablecoin (USDN), which is issued by the Neutrino Protocol. Unfortunately, all has not been smooth sailing for the USDN stablecoin with it experiencing several de-pegs from the US dollar and a mammoth decoupling of 98% in value since launching.
The lawsuit claims that Vires was marketed by Ivanov misleading investors. Finance — lying in wait to notch big dollars as breathtakingly lucrative, at the very time it secretly lined up transactions conspiring to pump WAVES tokens. Such manipulation led to the market cap of the WAVES token crashing down, loosing more than 95% at some point.
Allegations Against Ivanov
The business of Vires suffered major losses because Ivanov decided to treat his investors in this way, the court filing says. Sky Mavis said that around $530 million was stolen from its finance users. According to Alameda, Ivanov has largely ignored all their attempts to contact him with a view to asking for their assets back. The lawsuit claims Ivanov attended just one meeting in January 2023 and avoided any more outreach since.
This lawsuit is one of many items the bankruptcy estate of FTX does to recover lost assets from different parties. As it moves through the aftermath of FTX’s unprecedented disappearance – one that robbed users and investors of at least $8.9 billion — Alameda supposedly filed a record breaking 20+ separate lawsuits against various parties.
Implications for the Crypto Industry
The lawsuit highlights continuing problems in the crypto industry with disclosure and accountability. Should the allegations against Ivanov prove accurate, they could indicate serious violations of industry practice and also inspire questions about regulators. These lawsuits are considered essential for the recovery of lost funds, but they could also establish precedents relevant to future crypto regulations.
The aftermath of FTX’s liquidation persists to echo throughout the cryptocurrency sphere, sparking demands for heightened monetary literacy and risk avoidance strategies among speculators. Stakeholders are anticipating advancements in this lawsuit, and it continues to be evident that the legal confrontations involving FTX and its subsidiaries will influence the trajectory of crypto-currency legislation.
Sentence: In the end, Alameda Research’s legal fight against Sasha Ivanov is a key point in FTX’s downfall story and shows bigger problems for crypto businesses as they fight against dishonesty and protecting people’s money.
