Binance Fights Back: CZ Seeks to Dismiss $1.76B FTX Lawsuit Amid Controversy!

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<a href="https://zarusd.com/bnb-usd/">Binance</a>, CZ, filed to dismiss $1.76b lawsuit by FTX bankruptcy team

In simple terms, Binance (alongside its previous head, Changpeng Zhao) have requested that the court dismiss a lawsuit filed by FTX, which claims damages totaling approximately $1.76 billion.

The crypto market is still reeling from the aftermath of FTX’s downfall, as Binance and related entities, in a Delaware court filing dated May 16, have attempted to dismiss a lawsuit initiated by FTX’s bankruptcy attorneys. They argue that there’s no jurisdiction over them and that FTX itself was solely responsible for its own demise.

The legal action launched by the FTX Recovery Trust is aimed at retrieving approximately $1.76 billion worth of assets that FTX transferred to Binance in July 2021 to buy back equity. At that time, Binance was one of FTX’s major investors; however, they decided to sell their stake in the exchange later on. In its court submission, Binance contends that these funds should be considered safe from liquidation during bankruptcy proceedings, as the deal involved a securities contract, under the ‘safe harbor’ provision.

The Recovery Trust for FTX further asserted that Changpeng Zhao, who was then CEO of Binance, played a role in triggering a bank run on FTX via social media messages, which they deemed as part of an attempt to bring down FTX. In response, Binance argued that the posts were factual and denied any insinuation that their intent was harmful or malicious.

In simpler terms, Binance’s court filing suggests that the Plaintiffs’ theory against Changpeng Zhao is largely based on guesswork and speculation, with a significant portion of this information coming from a known fraudster’s after-the-fact assumptions.

Binance cites lack of jurisdiction, blames FTX for the collapse

Binance’s main point is that the court doesn’t have authority because the three FTX entities at issue are located overseas, specifically in the Cayman Islands and Ireland. Moreover, Binance asserts that these foreign entities were not involved in the disputed repurchase contracts.

The documentation further alleges that the primary cause of FTX’s collapse was its founder, Sam Bankman-Fried. Binance notes that the very nature of this lawsuit underscores “widespread dishonesty,” “continuing fraud,” and misleading statements by FTX management.

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2025-05-20 16:04