Alameda Research Files Lawsuit Against Waves Blockchain Founder, Claiming $90 Million Loss

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Jimmy Aki

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Jimmy Aki

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Jimmy has nearly 10 years of experience as a journalist and writer in the blockchain industry. He has worked with well-known publications such as Bitcoin Magazine, CCN, and Blockonomi, covering news...

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November 11, 2024 10:31 EST

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Seeking to recover $90 million, Alameda Research brought a lawsuit against Waves Blockchain founder Sasha Ivanov on November 11.

The filing alleges that Ivanov misused funds deposited on the Waves-based Vires.Finance platform and manipulated WAVES token prices.

Background of Alameda Research Lawsuit Against Ivanov, Deposits With Vires.Finance and WAVES’ Value Collapse

Court documents reveal that in March 2022, Alameda Research deposited $80 million in Tether (USDT) and USD Coin (USDC) into Vires.Finance.

These assets were later converted into $90 million worth of USDN, an algorithmic stablecoin created by the Neutrino Protocol.

However, USDN suffered multiple de-peggings and was eventually rebranded as Neutrino USD (XTN), which has since lost 98% of its value.

The lawsuit accuses Ivanov of artificially inflating WAVES token prices while secretly redirecting funds from Vires.Finance.

Although Ivanov marketed the platform as a promising opportunity for lenders, his alleged actions caused a 95% decline in WAVES’ value.

Alameda further claims that Ivanov dissolved Vires.Finance and other Waves-related entities to obstruct recovery efforts.

While Ivanov initially pledged to return Alameda’s assets, the lawsuit states he later refused to cooperate, exacerbating the financial losses.

FTX Legal Cases and WAVES Market Reaction

The lawsuit against Ivanov is part of a larger legal campaign led by Alameda Research and the FTX estate to recover funds lost during FTX’s collapse in November 2022.

This bankruptcy, which cost investors and users over $8.9 billion, remains one of the most notable events in crypto history.

Alameda has pursued over 20 lawsuits as part of its strategy to recoup financial shortfalls.

In a related case, Alameda filed a lawsuit to recover $11 million from a Crypto.com account allegedly linked to its operations.

The legal filing comes shortly after Caroline Ellison, a former Alameda executive, began her two-year prison sentence for her role in FTX’s downfall.

Since news of the lawsuit broke, WAVES tokens have experienced a modest 1.51% price increase, trading at $1.16 at press time.

However, the token’s recovery remains limited, hindered in part by Binance’s decision to delist WAVES on June, reducing its liquidity and market visibility.

The fallout from FTX’s collapse has also reignited calls for financial education reform in the crypto sector.

Reflecting on the aftermath of FTX’s collapse, Moe Vela, former senior adviser to U.S. President Joe Biden, has called for a focus on financial education within the crypto industry to prevent future crises.