Binance and its former CEO, Changpeng Zhao, have filed a motion to dismiss a $1.76 billion lawsuit brought by FTX’s bankruptcy trustees. The lawsuit alleges that Binance received funds improperly when FTX repurchased equity from the exchange in July 2021.
In a Delaware court filing dated May 16, it argued that the court lacks jurisdiction since the involved FTX entities are based outside the U.S., primarily in the Cayman Islands and Ireland. Binance also contends that the repurchase transaction is protected under the “safe harbor” clause because it qualifies as a securities contract.
Furthermore, it denied allegations that Changpeng Zhao’s social media posts contributed to a bank run on FTX, calling these claims “pure conjecture” sourced from hindsight speculation by a convicted fraudster.
Binance placed the blame for FTX’s collapse squarely on its founder, Sam Bankman-Fried, pointing to “pervasive malfeasance” and ongoing fraud within FTX leadership as detailed in the lawsuit itself.
This legal battle highlights the continuing ripple effects of the FTX collapse on the crypto industry, with significant stakes and reputations on the line.
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