Binance filed a motion to dismiss FTX’s $1.76 billion clawback suit, claiming a lack of jurisdiction and supposedly baseless arguments presented by the estate.
Lawyers for the world’s largest centralized exchange argued that FTX attorneys pretended that Binance and its co-founder, Changpeng Zhao, orchestrated a malicious scheme to cripple the now-defunct platform.
Court papers submitted to a Delaware judge on Friday said the beleaguered company attempted to hold Binance accountable for FTX’s crash, and “shift the blame” away from ex-CEO and founder Sam Bankman-Fried. Binance representatives stressed that Bankman-Fried was the centerpiece in “one of the most massive corporate frauds in history” and was sentenced to 25 years in prison by a federal court for criminal wrongdoing.
$1.7 billion clawback
The dismissal request comes months after FTX’s estate sought to recoup an estimated $1.76 billion in crypto exchanged between the two entities.
Binance was an early FTX investor and bought 20% in a 2019 equity deal. FTX later repurchased the company stake in 2021, using a basket of cryptocurrencies including BNB, BUSD, and its FTT token to complete the transaction. Following revelations about the company’s financial health in November 2022, Zhao mentioned that Binance would liquidate its FTT holdings via an X post.
According to the FTX estate, Bankman-Fried’s company was insolvent by the time of the share agreement. Bankruptcy administrators claimed that the deal was financed with misappropriated customer funds. They also said Zhao’s public tweets unfairly caused mass withdrawals from FTX and kneecapped the platform.
In response, Binance noted that FTX operated for over 16 months after the 2021 stock-crypto swap, adding that “the complaint contains no facts to suggest that the tweets were false.” Furthermore, Binance legal reps contended personal jurisdiction claims. Defense lawyers said Binance is based outside the United States, and Zhao was not personally involved in the share sale.
The dispute is part of FTX’s broader efforts to recover assets for its creditors, which it owes over $11 billion in repayments. Per previous reports, the estate plans to begin major bankruptcy disbursements on May 30.
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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