An $80 million deal between a rising decentralized finance (DeFi) project and a juggernaut crypto investment firm unraveled Monday, with both projects pointing fingers and wagging chins.

Reef Finance, a multi-chain liquidity provider, appeared to reverse course on an over-the-counter (OTC) deal for its REEF tokens halfway through due to “doubts around Alameda’s long-term interest in being a strategic investor,” the startup said in a Monday blog post. 

Reef had offered a 20% discount on the tokens to promote “synergies” between Serum and Solana – two projects in which Alameda is heavily invested. The dispute turned into a Twitter flame war, however, after a large portion of that initial token set was immediately transferred to Binance, presumably to be sold.

With the conflict, crypto plebs got a behind-the-scenes glimpse at an over-the-counter deal between one of crypto's most aggressive trading desks and yet another young DeFi team trying to make it big.

“For the first $20M tranche, we followed the movement of the sold [REEF] tokens and immediately saw that the tokens we had just transferred to Alameda were being offloaded on the Binance exchange,” Reef wrote in its blog post. “We could not understand why Alameda, our long-term strategic investor, would offload their tokens immediately after purchase to Binance.”

In contention is the existence of a vesting period for the tokens. Reef CEO Denko Mancheski told CoinDesk in an email that an immediate token flip was “definitely not what was supposed to happen.” Alameda, on the other hand, says there was no agreed-upon vesting period. Now the whole ordeal is public, with legal threats mounting. Alameda directed CoinDesk to its blog post when reached for comment.

Alameda agreed to purchase 2.7 billion REEF tokens worth an estimated $80 million on March 8, according to public documents. The purchase was set to be broken into two parts: One $20 million transaction followed by a press announcement, and then a second $60 million transaction. 

However, both sides now dispute if the second transaction was ever supposed to occur under the verbal agreements (occurring on messaging app Telegram) made prior to the trade. 

Mancheski told CoinDesk, “There was literally no legal agreement/contract (or any kind of paperwork whatsoever).”

“They portray themselves as a reputable VC fund while in reality they just manipulate projects/retail with their ‘reputation,’” Mancheski said of Alameda, which is helmed by FTX CEO and breakout crypto star Sam Bankman-Fried.

Alameda said in its Monday blog post the Reef team “initially agreed to an [$80 million] trade and locked in the price for the entire size. After settling the first tranche, Reef reneged and refused to settle the following tranches.”

Those claims were preceded by a tweet from Alameda Research trader Sam Trabucco, who said Reef “went to the press to brag” over the initial transaction and then “reneged on the OTC trade.”

Indeed, Reef did issue a press release on the initial $20 million purchase, as reported by CoinDesk and others. The Alameda blog post published Monday after Trabucco’s tweet makes it clear Alameda knew in advance about the press release. 

Regardless, the tokens remain at issue. 

Trabucco and Alameda agreed to take the remainder of the tokens under a vesting period as offered by Mancheski in a counter offer, with the caveat that the tokens would be transferred to Alameda. When Mancheski declined moving funds to Alameda, the dispute went public.

According to documents obtained by CoinDesk, Alameda is considering legal action against Reef. 

“I don’t really need to threaten here,” Alameda Head of OTC Ryan Salame said in a chat with Mancheski seen by CoinDesk. “We’re 100% in the right here.”

Alameda partner exchange FTX also threatened to delist REEF for conducting a “rugpull” in a now-deleted tweet. Some REEF contracts do remain on FTX as of press time.

Mancheski, on the other hand, told CoinDesk Reef has petitioned Binance to reveal its REEF trade book in order to prove Alameda pushed the REEF token’s price down.

“Basically we will be requesting Binance to give their trading log because we believe that they fulfilled their threat and dumped the price – which triggered liquidations and people lost a lot of money,” he said.

The REEF token was down by as much as 20% on Monday, according to CoinGecko. As of press time, it was down 4.5% over the past 24 hours.