Changpeng Zhao, the co-founder and former CEO of Binance, isn’t backing down. He’s asked a U.S. bankruptcy court to toss out the claims made by FTX’s bankruptcy estate, which is trying to recover a whopping $1.76 billion in funds allegedly exchanged between Binance and FTX.
In a filing submitted on Monday, Zhao argued that his home base in the UAE means he’s not under Delaware’s jurisdiction. He also made the case that the transactions at the heart of the dispute were cross-border, meaning U.S. laws don’t apply. His filing slammed the lawsuit, saying:
"Plaintiffs' fraudulent transfer claims improperly demand the extension of bankruptcy law abroad."
Zhao isn’t the only Binance-affiliated figure challenging the case. In July, two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, filed similar dismissal requests. Guess they’re all on the same page here.
The $1.76B Battle
So, what’s this all about? The drama centers around FTX Trust and FTX Digital Markets, which are trying to recover funds they claim were wrongly moved by Sam Bankman-Fried. The legal showdown stems from a 2024 lawsuit accusing Binance and several executives of improperly pocketing funds when they cashed out their equity stakes in FTX. These stakes included around 20% of FTX’s global operations and 18.4% of its American arm.
Zhao, however, isn’t having it. In the filing, he stressed that Binance and FTX were "briefly business partners" before parting ways, with Binance returning its equity stake in exchange for crypto, including FTX’s own token. So, as far as Zhao’s concerned, the whole thing reeks of a blame game. He pointed out that it’s absurd to pin the blame for Bankman-Fried’s mess on him and others involved in the deal.
Zhao’s filing bluntly stated:
"Mr. Zhao is not amenable to suit in this forum, and the statutes Plaintiffs seek to enforce do not reach the extraterritorial transactions described in the Complaint."
And for some extra drama, let’s not forget, Bankman-Fried is currently serving a 25-year sentence for fraud and conspiracy, while Zhao himself recently served a four-month stint in prison after pleading guilty to U.S. anti-money laundering violations. What a time for crypto execs!
Anastasiia G
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