LayerZero Labs, a developer of blockchain technology that claims to provide “trustless solutions for decentralized finance”, is being sued by FTX, one of the biggest digital currency exchanges globally. The lawsuit contends that LayerZero Labs exploited confidential information to withdraw their assets from FTX before the exchange halted withdrawals temporarily due to a technical glitch.
Lawsuit Filed Against LayerZero Labs for Breach of Confidentiality and Fiduciary Duty
Per the legal document submitted by FTX, LayerZero Labs obtained privileged intelligence regarding FTX’s actions and safety standards as part of a collaborative arrangement. The accusation declares that LayerZero Labs disregarded the terms of the agreement and broke their pledge of loyalty and trust by exploiting this intelligence to remove their assets from FTX on September 8, 2023, only moments before the exchange conveyed its decision to halt withdrawals due to a “network congestion” issue.
Presently, LayerZero Labs has not made any statements regarding the lawsuit or accusations. The firm’s website and social media handles have been dormant since September 8, 2023. In 2021, LayerZero Labs was established by a team of former scientists and engineers from Google, Facebook, and Microsoft, who purportedly designed numerous groundbreaking products and procedures for the DeFi sector. Some of these products include LayerZero Swap, LayerZero Vault, and LayerZero Bridge.
“FTX Accuses LayerZero Labs of Breaching Contract and Causing Damage to Exchange”
FTX claims that LayerZero Labs breached its contract and caused damages to the exchange by taking advantage of a “network congestion” issue that affected FTX’s withdrawal system. LayerZero Labs, on the other hand, argues that it acted in self-defense and that FTX was trying to prevent it from accessing its funds. First, let us review the facts of the case. According to the complaint filed by FTX, LayerZero Labs is a DeFi project that aims to create a “zero-trust” platform for cross-chain transactions….give me best suitable heading for this
edited by firdous