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Highlights
- Binance seeks dismissal of FTX’s $1.76B clawback lawsuit, citing lack of jurisdiction.
- The motion argues FTX is deflecting blame from Sam Bankman-Fried’s fraud.
- Binance denies involvement in FTX’s collapse or misleading market actions.
Binance is fighting a $1.76 billion lawsuit from the FTX estate, seeking a Delaware court to dismiss it. The case centres on a 2021 equity buyback deal between the two crypto exchanges, which took place over a year before FTX collapsed. The crypto exchange argues the lawsuit is “legally flawed” and should be dismissed.
FTX says it used customer funds without permission to repurchase the exchange’s stake. But the firm’s lawyers claim the accusation is based on weak assumptions and lacks evidence.
Binance Accuses FTX of Avoiding Accountability
In its court filing, Binance argued that FTX is trying to shift blame away from its founder, Sam Bankman-Fried, who is serving a 25-year prison sentence for fraud. The exchange claims the lawsuit ignores the real reason for FTX’s failure, calling it “one of the biggest corporate frauds in history.”
The company also said it had no role in FTX’s collapse and emphasized that none of its executives. The company also defended the former CEO Changpeng Zhao saying that he was not directly involved in the 2021 deal.
FTX also blames a series of tweets by Zhao in November 2022—especially one about selling Binance’s FTT tokens—for sparking panic among users and speeding up its downfall. Binance pushed back, saying those tweets came after a CoinDesk report that had already raised major concerns about FTX’s finances.
Jurisdiction Challenge and Wider Impact
Binance is also disputing the court’s authority over the case, saying its companies are based outside the U.S. and weren’t directly responsible for any disputed fund transfers. This case is part of FTX’s larger effort to recover over $11 billion for customers and creditors.
With large bankruptcy payouts expected to begin on May 30, the outcome of this lawsuit against CZ could play a key role in how much FTX’s creditors end up receiving. The upcoming week is an important one for FTX Creditors as the bankrupt derivatives exchange FTX’s repayment process begins.
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