Binance founder Changpeng Zhao seeks dismissal of FTX estate's $1.76 billion clawback lawsuit
Quick Take
- Changpeng Zhao, co-founder and former CEO of Binance, has asked a U.S. bankruptcy court to dismiss claims in a lawsuit filed by FTX’s bankruptcy estate.
- The lawsuit seeks to recover $1.76 billion allegedly exchanged between the two entities.
Changpeng Zhao, cofounder and former CEO of Binance, has asked a U.S. bankruptcy court to dismiss claims in a lawsuit brought by the FTX bankruptcy estate, which is seeking to recover $1.76 billion allegedly exchanged between the two entities.
In a filing submitted Monday, Zhao argued that his residency in the UAE places him beyond Delaware's legal jurisdiction. The filing also cited the cross-border nature of the disputed transactions, arguing that the relevant U.S. statutes lack extraterritorial reach.
"Plaintiffs' fraudulent transfer claims improperly demand the extension of bankruptcy law abroad," the filing said.
Zhao joins other Binance-affiliated individuals in challenging the court's reach in the complex dispute. Previously, two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, filed similar dismissal requests in July.
The case centers on efforts by FTX Trust and FTX Digital Markets Ltd. to recover funds they claim were improperly moved by convicted crypto mogul Sam Bankman-Fried. The legal confrontation stems from a November 2024 lawsuit targeting Binance and multiple executives over a July 2021 equity buyback arrangement with Bankman-Fried.
FTX's lawyers alleged that Binance and its former leadership improperly received funds when they divested their ownership stakes — approximately 20% of FTX's global operations and 18.4% of its American subsidiary.
Additionally, Zhao said in the Monday filing that Binance and FTX were "briefly business partners" but later they separated and Binance returned their equity stake in exchange for cryptocurrencies, including FTX exchange token.
"Plaintiffs nonsensically blame Mr. Zhao and others for Mr. Bankman-Fried's failings. But Mr. Zhao is not amenable to suit in this forum, and the statutes Plaintiffs seek to enforce do not reach the extraterritorial transactions described in the Complaint," the filing said.
Bankman-Fried is currently serving a 25-year sentence for fraud and conspiracy charges. Zhao recently served four months in prison after pleading guilty to U.S. anti-money laundering violations.
Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.
© 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.
