Alameda Sues Waves Founder to Recover $90 Million

Alameda Research, a trading firm once affiliated with the now-defunct cryptocurrency exchange FTX, has filed a lawsuit against Aleksandr Ivanov, founder of the Waves blockchain platform, to reclaim approximately $90 million. This legal effort is part of Alameda's broader campaign to recover assets and repay creditors impacted by FTX's collapse in 2022.

The complaint, filed on Sunday, accuses Ivanov and his associated companies, Numeris Ltd. and DLTech Ltd., of engaging in fraudulent practices that allegedly caused significant financial losses for Alameda. According to Alameda, it deposited around $80 million in stablecoins into Vires.Finance, a liquidity platform operating within the Waves ecosystem. However, Alameda claims that these funds are now trapped due to what it describes as Ivanov's mismanagement and deceptive activities.

Alameda asserts that Ivanov conducted a series of transactions aimed at "artificially inflating" the value of the WAVES token, a cryptocurrency associated with the Waves platform. During this time, Ivanov allegedly diverted funds away from Vires, which ultimately led to a dramatic devaluation of the WAVES token. The complaint highlights that the token’s market value has plunged by over 95%, contributing to a $530 million loss for Vires users. Alameda claims that these manipulative actions were part of a strategy to prop up the value of WAVES temporarily, only to leave investors and users bearing the financial fallout when the token’s price collapsed.

Furthermore, Alameda's lawsuit accuses Ivanov of attempting to manipulate public perception by attributing the Waves ecosystem's instability to Alameda. The firm alleges that while Ivanov publicly blamed Alameda for problems within the Waves network, he privately sought to extort funds from them. According to the complaint, Ivanov threatened to block Alameda’s access to their funds unless they provided financial support to stabilize the Waves and Vires platforms. When Alameda refused, Ivanov allegedly used his authority within the Vires decentralized autonomous organization (DAO) to restrict Alameda’s access to their deposited assets.

In November 2022, Ivanov publicly acknowledged that Alameda had placed approximately $90 million in stablecoins as collateral. However, he is reported to have taken steps to freeze these funds, stating that the freeze was intended to ensure repayment to FTX users affected by the collapse. Since then, Alameda claims that Ivanov has disregarded multiple attempts by the firm to negotiate a resolution or retrieve their assets, leaving their funds inaccessible.

Alameda’s lawsuit not only seeks to recover the frozen assets but also requests compensation for damages related to alleged violations of the Bankruptcy Code, including fraud and conversion of property. The complaint outlines that Alameda is determined to pursue all possible avenues to retrieve any additional assets that Ivanov or his companies may have acquired through these activities. The firm also argues that Ivanov’s actions have further complicated efforts to reclaim assets, as he has reportedly taken steps to dissolve the legal entities that oversee both the Waves and Vires platforms. This move, according to Alameda, raises serious questions about the feasibility of recovering their funds and holding Ivanov accountable.

The case represents one aspect of Alameda Research's broader initiative to reclaim assets for the benefit of creditors impacted by FTX's failure. The lawsuit indicates that Alameda is prepared to modify or expand its complaint as new information becomes available, leaving open the possibility of widening the scope of its legal action. Alameda's legal team has emphasized that it is committed to taking whatever steps are necessary to pursue the assets and secure compensation for the firm’s creditors.

As the lawsuit unfolds, Ivanov has yet to make a public statement addressing these allegations. The case sheds light on the broader issue of asset recovery in the cryptocurrency industry, especially in cases where digital assets are tied up in decentralized platforms. The legal process could have implications for how similar cases are handled in the future, as it brings attention to the challenges associated with recovering assets in a decentralized finance (DeFi) environment.

In filing this lawsuit, Alameda Research aims to set a precedent for accountability within the cryptocurrency ecosystem. By challenging the actions of prominent figures in the industry, Alameda’s case may encourage closer scrutiny of the operations of blockchain platforms like Waves. With rising interest in DeFi, cases like this highlight the need for transparency and legal clarity when handling large amounts of digital assets.

The outcome of Alameda's lawsuit could influence future litigation involving asset recovery in the crypto world, potentially encouraging other companies to pursue similar claims if they believe they have been victims of fraud or mismanagement.