Binance Founder Challenges $1.76B FTX Clawback Suit in Delaware Court

Zhao Changpeng, the founder of former crypto exchange giant Binance, has filed a motion with a U.S. Delaware bankruptcy court to dismiss a $1.76 billion clawback lawsuit brought by the FTX bankruptcy estate. The lawsuit alleges that FTX illegally transferred assets prior to its 2022 collapse and seeks to recover those funds from individuals and entities connected to Binance. Zhao, who is based in the United Arab Emirates, argues that the U.S. court lacks jurisdiction over him and that he was merely a nominal party in the transactions under scrutiny [1][2][3][4].

In his filing, Zhao characterizes the allegations as “nonsensical” and legally unfounded. Binance has also publicly dismissed the claims as baseless. This legal action is part of a broader strategy by Binance-linked entities to distance themselves from liability arising from FTX’s collapse. The lawsuit represents one of several legal efforts by the FTX estate to reclaim assets from individuals and organizations allegedly tied to the transfer of FTX funds [5][6].

The Delaware court will evaluate Zhao’s motion, which rests on legal arguments surrounding U.S. jurisdiction and the nature of his involvement in the transactions. If the court sides with Zhao, it could significantly undermine the FTX estate’s case and potentially set a precedent in cross-border crypto litigation. The outcome could influence how U.S. courts handle similar claims involving offshore entities and individuals, shaping the legal landscape for cryptocurrency-related cases [7].

The ongoing legal disputes highlight the broader regulatory and operational challenges facing crypto exchanges in the aftermath of FTX’s collapse. As Binance continues to navigate these legal hurdles, it faces heightened regulatory scrutiny and a complex web of international legal frameworks. The resolution of this case may have wider implications for the regulation of cross-border digital asset transactions and the liability of individuals and entities operating in the global crypto market.

Source:

[1] Could FTX's Lawsuit Get $1.76 Billion from CZ and Binance?

https://beincrypto.com/cz-ftx-binance-lawsuit-delaware-dismissal-filing/

[2] Ex-Binance CEO Seeks Dismissal From $1.8 Billion FTX

https://news.bloomberglaw.com/bankruptcy-law/ex-binance-ceo-seeks-dismissal-from-1-8-billion-ftx-trust-suit

[3] CZ seeks dismissal of $1.76B FTX clawback suit

https://coinness.com/en/news/79303

[4] Binance's CZ files to dismiss $1.76 billion FTX clawback

https://cryptorank.io/news/feed/2c1d0-cz-files-to-dismiss-ftx-clawback-suit

[5] Binance Founder Seeks Exit From FTX $1.76B Clawback Suit

https://www.law360.com/bankruptcy-authority/large-cap/articles/2373407/binance-founder-seeks-exit-from-ftx-1-76b-clawback-suit

[6] Wu Blockchain on X

https://x.com/WuBlockchain/status/1952846481200955841

[7] News - Binance | CryptoRank.io

https://cryptorank.io/news/tag/binance