Alameda Research Files Lawsuit Against Waves Founder Over $90 Million, Accusing Him of Manipulating $WAVES Prices

Alameda Research Seeks to Recover $90 Million from Waves Founder

The trading arm of the bankrupt crypto exchange FTX – Alameda Research – has initiated legal action against Aleksandr Ivanov, the founder of Waves blockchain, aiming to reclaim at least $90 million tied up in Vires.Finance.

The lawsuit, filed on 10 November 2024, accuses Ivanov of orchestrating fraudulent transactions to inflate the value of the Waves token, leading to significant losses for Alameda.

The Funds at the Heart of the Dispute

Alameda claims that in March 2022, it deposited approximately $80 million worth of Tether (USDT) and USD Coin (USDC) into Vires.Finance, a liquidity platform built on the Waves blockchain.

These assets were later converted into USDN, an algorithmic stablecoin issued by the Neutrino Protocol, which was meant to be pegged to the US dollar.

However, the lawsuit reveals that the value of the assets depreciated dramatically, with USDN repeatedly losing its peg, and the token ultimately rebranded as Neutrino USD (XTN), which has since dropped 98% of its value.

Alleged Manipulation of the Waves Ecosystem

The core of Alameda's claim revolves around accusations that Ivanov deliberately inflated the value of WAVES, the native token of the Waves blockchain.

Alameda asserted in the filing:

"While Ivanov marketed Waves and Vires as opportunities for lenders and other users to make substantial profits, Ivanov secretly orchestrated a series of transactions that inflated artificially the value of WAVES, while at the same time syphoning funds from Vires."

Aleksandr Ivanov, founder of Waves blockchain

Failed Attempts to Regain the Frozen Assets

In the months following the deposit, Alameda attempted to recover its assets from Vires.Finance, which had been frozen amid the volatility surrounding USDN.

Despite repeated efforts, Ivanov allegedly failed to cooperate, engaging in minimal communication.

According to the filing, Ivanov "agreed to join only one call with the debtors in January 2023" but subsequently ignored all further attempts at contact.

The filing also claims that Ivanov dissolved the legal entities behind Vires.Finance and Waves, further complicating any recovery of funds.

Waves' Tumultuous Decline and the Role of Alameda

The market value of WAVES took a severe hit after the fraudulent activity came to light, plunging by 95%.

In response, Ivanov attempted to deflect blame by accusing Alameda of destabilising the Waves ecosystem.

Alameda stated that he accused them on Twitter (now X) that they had “manipulated the $waves price and organised FUD (Fear, Uncertainty, and Doubt) campaigns to trigger panic selling.”

FTX's Ongoing Legal Struggles

This lawsuit against Ivanov is just one of many actions taken by the FTX estate to recover funds for creditors.

In the past week alone, over 20 lawsuits have been filed against various individuals and entities linked to the crypto exchange's collapse.

These include high-profile targets such as SkyBridge Capital CEO Anthony Scaramucci and Deltec Bank chairman Jean Chalopin.

The ongoing legal battle highlights the far-reaching consequences of FTX’s bankruptcy and the complicated web of financial transactions that are being scrutinised.

The case against Ivanov and Vires.Finance is set to be one of the most contentious, with the outcome likely to shape the future of crypto recovery efforts.

The market will be watching closely as legal action unfolds, with many hoping that it will lead to the return of at least some of the lost funds to the creditors of FTX.