Alameda Research Sues Waves Founder Over $90 Million Tied to Vires.Finance
Alameda Research, the hedge fund arm of the bankrupt cryptocurrency exchange FTX, has filed a lawsuit against Sasha Ivanov, the founder of the Waves blockchain, for allegedly fraudulently obtaining $90 million from them by way of a decentralized finance platform, Vires.Finance, operating on the Waves blockchain. This latest case becomes part of the ongoing saga of financial and legal challenges surrounding the collapse of FTX and all affiliated entities.
Allegations of Manipulation and Misrepresentation
The class action claims that in March 2022, Alameda Research transferred approximately $80 million Tether USDT and USD Coin USDC to Vires.Finance. This was followed up immediately by an exchange into approximately $90 million USDN, an algorithmic stablecoin issued by Neutrino Protocol. But USDN also went through a lot of instability, losing its peg to the U.S. dollar many times and later its rebranding into Neutrino USD (XTN) after it suffered a dramatic 98% drop in value.
It is alleged, according to the lawsuit by Alameda, that Ivanov has been conducting a fake promotion of Vires.Finance as being an extremely lucrative opportunity for investors-to be a lucrative vehicle promising staggering returns. While its definition could seem real, he had allegedly manipulated the value of WAVES, the native cryptocurrency of the Waves blockchain. The lawsuit claimed that Ivanov had faked the price of WAVES while withdrawing funds online from Vires.Finance and ultimately caused a 95% crash in the price of WAVES.
Charges of evasion and dissolution of entities
In the lawsuit, it is also mentioned that Ivanov had received several outreach attempts by Alameda Research to return the hedge fund’s assets owed to FTX creditors. Ivanov was also accused of dissolving the legal entities operating Vires.Finance and Waves, making any plan for retrieval of assets difficult. Ivanov is said to have tried deflecting blame upon Alameda Research in a parallel action, accusing them of trying to destabilize the Waves ecosystem just to divert attention away from him.
Implications for the Crypto Industry
This is the next step in FTX’s wider-reaching strategy of lawsuits to try to claw back assets after its implosion in a bid to repay creditors and mitigate financial losses from the bankruptcy. It comes after a similar lawsuit from FTX to claw back more than $11 million from a Crypto.com account connected to Alameda. As it develops, the case may have great implications for decentralized finance in putting added pressure on blockchain founders and a lack of transparency into crypto operations.
