Binance Moves to Dismiss FTXs $1.76 Billion Lawsuit Over Collapse

Binance has filed a motion to dismiss a $1.76 billion lawsuit brought by FTX, asserting that the lawsuit is an attempt to distort historical events. The lawsuit alleges that Binance and its former CEO, Changpeng Zhao, played a pivotal role in the collapse of FTX. However, Binance strongly disputes this claim.

In a filing submitted on May 16 to the Delaware Bankruptcy Court, Binance's legal team argued that the lawsuit is "legally deficient." They contend that FTX's downfall was not due to market sabotage but rather the result of its own fraudulent activities. The filing explicitly references Sam Bankman-Fried's conviction on seven felony counts, emphasizing that FTX's collapse was a consequence of one of the most significant corporate frauds in history.

FTX's estate alleges that Zhao's November 2022 tweet about liquidating FTT tokens triggered a panic that led to the crash. Binance refutes this, stating that the decision to exit was based on a CoinDesk report from a few days earlier, which revealed Alameda's unstable financial condition. Binance maintains that there is no evidence of malicious intent on their part and that Zhao's claim about minimizing market impact was a fair assessment, not indicative of bad faith.

Binance also challenges the jurisdiction of the U.S. court over the case, arguing that none of the entities named in the lawsuit are based in the U.S. The company asserts that the complaint relies on "pure conjecture" and is largely based on the "hindsight speculation" of a convicted fraudster. Meanwhile, FTX is preparing to repay $5 billion to creditors starting May 30, as part of its reorganization plan. Some creditors could recover as much as 120% of their claims, depending on eligibility and class.