Binance Founder Challenges $1.76B FTX Lawsuit Over Jurisdiction and Procedural Flaws

Changpeng Zhao, founder of Binance, has filed a motion to dismiss a $1.76 billion lawsuit from FTX’s bankruptcy estate, claiming the Delaware court has no jurisdiction over him. The lawsuit, initiated by FTX Digital Markets Ltd., seeks to recover assets from a 2021 equity repurchase deal in which FTX transferred funds through Alameda Research to buy back shares from Binance. Zhao, who now resides in the United Arab Emirates, argues that the service of the lawsuit was improperly executed given his status as a non-U.S. national and his lack of direct ties to Delaware [1].

The motion emphasizes that the transactions in question took place outside the U.S. and were governed by international contracts, not subject to U.S. bankruptcy law. Binance’s legal team has underscored the global nature of the crypto industry and the procedural flaws in the lawsuit, particularly regarding how the claim was served and the legal basis for jurisdiction. They also argue that Zhao was merely a nominal signatory in the deal and did not personally benefit from the transfers [2].

This case is part of a larger legal landscape following the 2022 collapse of FTX, which triggered a wave of litigation and regulatory scrutiny. While FTX’s estate continues to pursue claims against various entities, Binance has consistently defended its actions as legitimate and in good faith. The outcome of this motion could set a significant precedent, potentially limiting U.S. courts’ authority in international crypto disputes and reshaping how cross-border digital asset transactions are treated in litigation [3].

If the court rules in favor of Zhao, it may signal a shift in the legal approach to U.S. jurisdiction in crypto-related cases, particularly those involving non-U.S. entities and individuals. It could also influence the distribution of remaining assets in the FTX bankruptcy estate and affect the broader framework for handling international crypto litigation [4].

The legal battle highlights the complexities of jurisdictional challenges in the global crypto ecosystem. As courts grapple with the intersection of traditional legal boundaries and the borderless nature of digital assets, this case may serve as a pivotal moment in shaping future legal standards [5].

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[1] [CZ Seeks Dismissal of FTX Clawback Lawsuit](https://www.cryptoknowmics.com/news/cz-seeks-dismissal-of-ftx-clawback-lawsuit)

[2] [Binance founder Changpeng Zhao seeks dismissal of FTX ...](https://www.theblock.co/post/365743/changpeng-zhao-seeks-dismissal-ftx-clawback-lawsuit)

[3] [CZ Seeks Dismissal of FTX's $1.76B Clawback Suit, Citing ...](https://web.ourcryptotalk.com/news/cz-requests-dismissal-of-ftx-suit)

[4] [Vaultz Capital Boosts Bitcoin Holdings by 47.85 BTC](https://m.economictimes.com/crypto-news-today-live-06-aug-2025/liveblog/123126163.cms)

[5] [Changpeng Zhao Files Motion to Dismiss $1.7 Billion FTX ...](https://coincentral.com/changpeng-zhao-files-motion-to-dismiss-1-7-billion-ftx-bankruptcy-lawsuit/)