Binance Challenges FTX’s $1.76 Billion Lawsuit in Court
On May 16, Binance and its former CEO, changpeng Zhao, filed a motion in Delaware court too dismiss a $1.76 billion lawsuit from FTX’s bankruptcy lawyers. The crypto world is still grappling wiht the fallout from the FTX collapse.
FTX’s Recovery Trust launched the lawsuit to reclaim $1.76 billion. This sum was paid by FTX in July 2021 to buy back equity from Binance.At one point, Binance was a major FTX investor but later decided to sell its stake. Binance believes the funds should be safeguarded in bankruptcy under the “safe harbor” clause, as the transaction was related to a securities contract.
FTX claims Zhao’s social media posts caused a bank run, aiming to dismantle FTX. Binance responds that these posts were accurate and any malice claims are speculative. They state, “The Plaintiffs’ theory relies on pure conjecture, including from a convicted fraudster.”
Binance argues the court lacks jurisdiction as the FTX entities involved operate outside the U.S. they also blame FTX’s founder, Sam Bankman-Fried, for the collapse, citing “pervasive malfeasance” and “ongoing fraud” by FTX leadership.
Binance seeks to dismiss the lawsuit and emphasize FTX’s duty for its own downfall.
