Changpeng Zhao Seeks Dismissal of FTX’s $1.8 Billion Lawsuit

Former Binance CEO Changpeng Zhao (CZ) has filed a motion in the Delaware bankruptcy court requesting the dismissal of a $1.8 billion lawsuit brought by bankrupt crypto exchange FTX. The lawsuit alleges that Binance received fraudulently transferred funds in a 2021 share buyback deal, using customer assets.

Changpeng Zhao Seeks Dismissal Of Ftx’s $1.8 Billion Lawsuit

However, Zhao argues that the case is an attempt to “unreasonably shift blame” to him instead of FTX founder Sam Bankman-Fried, who is currently serving a 25-year prison sentence for fraud. Now residing in the UAE, Zhao also claims that the case has no jurisdiction in the U.S. since the entire transaction occurred outside the country and the relevant statutes have no extraterritorial application.

FTX, now run by a team of lawyers focused on recovering assets for creditors, claims the exchange knowingly used customer funds for the $1.8 billion repurchase deal with Binance, even though it couldn’t afford the transaction at the time.

Zhao insists he was not involved in or had control over any of the cryptocurrency transfers. The parties involved were based in Ireland, the Cayman Islands, and the British Virgin Islands — jurisdictions beyond U.S. legal reach.

His legal team argued that Zhao was merely a “nominal counterparty” and not a recipient of the crypto assets, which consisted of Binance USD (BUSD) and FTX Token (FTT), with no fiat currency involved.

Cz On X
Cz On X

Regarding his controversial social media posts in late 2022, Zhao said they did not cause FTX’s collapse, as alleged. After CoinDesk reported that a large portion of FTX’s assets were in its own token (FTT), Zhao posted that Binance would sell its FTT holdings. FTX claimed this triggered mass withdrawals and accelerated its downfall.

Zhao’s lawyers countered that the company’s collapse was inevitable due to its fraudulent nature. “Even if the timing of the collapse was influenced by Mr. Zhao’s posts, FTX was a fraudulent enterprise that should never have existed,” they argued.

In May, Binance also filed a motion to dismiss the lawsuit, calling it “legally deficient” and reiterating that FTX collapsed due to being “one of the most massive corporate frauds in history.” FTX also sued two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, both of whom have likewise requested the court to dismiss the claims.

While Zhao served a four-month prison sentence last year for money laundering violations, Sam Bankman-Fried received a 25-year sentence in March 2024 for his role in the FTX scandal. He is currently appealing the conviction, with a hearing scheduled for November.

Love

0.0/5

Love

Latest

Binance.us Accused Of Political Favoritism After Listing Trump Family’s Usd1 Token

News | Editor Choice | Policy & Regulations

Binance.US Accused of Political Favoritism After Listing Trump Family’s USD1 Token

Binance.US is facing a wave of fierce criticism after listing the Trump family’s USD1 stablecoin, just a week after Donald Trump’s controversial pardon of Changpeng Zhao — a move many see as a “political favor” between the White House and the crypto world.

Spacex Moves $31 Million In Bitcoin, What Is Elon Musk Planning

News | Bitcoin | Editor Choice

SpaceX Moves $31 Million in Bitcoin, What Is Elon Musk Planning?

SpaceX’s sudden $31 million Bitcoin transfer within just one week has sent shockwaves through the market, sparking speculation that Elon Musk may be preparing for a mysterious strategic move.

21shares Files For Hype Etf, While Bitwise’s Solana Etf Records

News | Altcoin | Editor Choice

21Shares Files for HYPE ETF, While Bitwise’s Solana ETF Records

The crypto ETF market is heating up as 21Shares and Bitwise roll out new products, signaling Wall Street’s growing interest in altcoins.

Bitcoin Eyes A Hopeful November Amid Fed Division On December Rate Cut

News | Bitcoin | Editor Choice

Bitcoin Eyes a Hopeful November Amid Fed Division on December Rate Cut

Following the Federal Reserve’s widely expected rate cut, the crypto market has yet to show signs of recovery as internal divisions over a potential December easing weigh on sentiment, making Bitcoin’s short-term outlook more cautious than ever.

Ethereum’s Key Changes After The Fusaka Upgrade

News | Altcoin | Editor Choice

Ethereum’s Key Changes After the Fusaka Upgrade

The Fusaka upgrade marks a pivotal step in Ethereum’s journey toward large-scale scalability, promising faster transaction speeds, enhanced security, and laying the foundation for the next explosive phase of the world’s leading blockchain.

Screenshot 2025 10 20 091338