CZ Challenges Jurisdiction in $1.8B FTX Lawsuit Claims

Changpeng Zhao, the co-founder of Binance and commonly known as CZ, has filed a motion seeking dismissal from a $1.8 billion lawsuit brought by the FTX bankruptcy estate. The request centers on jurisdictional issues, with CZ’s legal team asserting that the U.S. court overseeing the case has no legal authority to pursue claims against him. CZ, who currently resides in the United Arab Emirates, argues that U.S. bankruptcy laws do not apply extraterritorially, meaning they cannot be enforced against individuals outside the country [1].

The lawsuit accuses CZ of contributing to FTX’s collapse through public statements and actions that allegedly triggered a liquidity crisis at the now-defunct exchange. However, CZ’s defense claims that the court’s jurisdiction is limited to within U.S. borders and that the trust-related claims brought by FTX’s liquidators are not applicable in this case [1]. This argument is grounded in the principle of extraterritoriality, which questions whether U.S. legal frameworks can extend to individuals and entities operating abroad [2].

The case is part of a broader legal battle between the FTX bankruptcy estate and Binance, which has faced its own regulatory challenges in multiple jurisdictions. The legal outcome could set a significant precedent for future cases involving international figures and companies in the cryptocurrency industry, particularly regarding the enforceability of U.S. law in cross-border legal disputes [3].

If the court rules in favor of CZ, it could signal a shift in how U.S. courts handle cases involving global crypto leaders, especially those based in offshore jurisdictions. The decision may also shape the legal landscape for other firms and individuals who operate primarily outside the U.S. and seek to avoid U.S. regulatory or judicial reach [3].

CZ’s move has already drawn attention in the crypto community, with some observers noting the broader implications for the enforcement of legal claims in a decentralized, globalized industry. As the case unfolds, it will remain a focal point for legal scholars, regulators, and market participants seeking to understand the evolving boundaries of jurisdiction in digital finance [1].

Source: [1] [CZ Seeks Dismissal from $1.8B FTX Lawsuit Over Jurisdiction](https://coinmarketcap.com/community/articles/6892bf43e7f376141906017b/)