CZ Calls $1.8B FTX Lawsuit Nonsensical, Says U.S. Court Has No Jurisdiction

Changpeng Zhao (CZ), the former CEO of crypto exchange Binance, has filed a motion in the Delaware bankruptcy court asking them to dismiss a $1.8 billion FTX lawsuit. The case centers on a 2021 share repurchase deal between FTX and Zhao. CZ said that he lives in the UAE and that the US court lacks jurisdiction over him.

Former Binance CEO Slams FTX Lawsuit

In the $1.8 billion clawback lawsuit, the FTX trust claimed that the funds were improperly transferred by former FTX CEO Sam Bankman-Fried. In November 2024, the FTX estate and FTX Digital Markets filed a lawsuit against Binance and several of its executives, challenging a July 2021 share repurchase agreement involving Sam Bankman-Fried.

Responding to it, CZ has filed a motion in bankruptcy court requesting that the claims against it be thrown out. In his latest motion filing, Zhao said:

“The claims are so far removed from Delaware, and even the United States, that the statutes at issue, which lack extraterritorial application, do not even apply.”

Last month, in July, two Binance executives – Samuel Wenjun Lim and Dinghua Xiao – had already urged the court to dismiss them from the lawsuit. Zhao also stated that he was a “nominal counterparty” in this transaction.

The filing further stated that the FTX trust and FTX Digital Markets “nonsensically blame” Zhao and crypto exchange Binance, for Sam Bankman-Fried’s wrong acts. Zhao stated that the two crypto firms were “briefly business partners,” with Binance holding a 20% stake in FTX before parting ways due to “personal grievances.” He added that the equity was later exchanged for cryptocurrency.

Zhao Cites Bankruptcy Court Rules

In the latest court filing, Changpeng Zhao argued that serving U.S. counsel on a foreign defendant violates bankruptcy procedures and invalidates the complaint. Zhao, who resides in the UAE, also claimed that U.S. bankruptcy law does not definitively extend to foreign transfers.

The filing also notes that FTX trust is attempting to overreach by applying fraudulent transfer claims internationally. Zhao said the constructive fraud accusations fail to meet legal standards under safe harbor provisions. In April, Zhao also rejected accusations of having ties with the US Federal Reserve.

Zhao recently completed a four-month prison term after pleading guilty to U.S. anti-money-laundering violations. On the other hand, FTX founder Sam Bankman-Fried is serving a 25-year sentence for fraud and conspiracy.