Alameda Research, the sister hedge fund of the bankrupt crypto exchange FTX, has filed a lawsuit against Sasha Ivanov, the founder of the Waves blockchain, seeking to recover $90 million worth of crypto assets. The lawsuit, filed on November 10, accuses Ivanov of fraud and misconduct involving Vires.Finance, is a decentralized exchange built on the Waves blockchain.
In March 2022, Alameda ‘deposited about $80 million on the Vires.Finance wrapped USDT (USDT) and wrapped USD Coin (USDC) as part of their trading and investment activities,’ the lawsuit stated. The money was converted into around $90 million worth of USDN, an algorithmic stablecoin minted by the Neutrino Protocol. While USDN had multiple instances of lassoing its peg to USD and was then rebranded to Neutrino USD (XTN), its value has since lost 98%.
Alameda Sues Waves Founder for $90M Over Fraud Allegations
According to the filing, Ivanov lured investors by touting Vires.Finance is a platform for ‘substantial profits’ in lending and in the general use of the platform. But the lawsuit says Ivanov secretly engineered waves of transactions to artificially inflate the value of the WAVES token while he drained money from the Vires platform. The value of WAVES, therefore, fell by 95% (or USD 13.5 billion), according to the lawsuit.
Ivanov defended himself from the allegations by pointing the finger at Alameda, which the Waves ecosystem firm accused of destabilizing the ecosystem in hopes of deflecting attention from Ivanov’s role in the alleged fraudulent activities. Alameda further claims that Ivanov failed to engage with any of the numerous attempts to communicate about the return of the company’s assets and that the legal entities managing Vires.Finance and the Waves blockchain dissolved.
This follows another lawsuit filed by FTX, which sued a Crypto.com account it believes belongs to Alameda Research, seeking over $11 million. That case claims Alameda uses shell companies and employee names to disguise its crypto trading trades.
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