Binance has asked a Delaware court to throw out a
$1.76 billion clawback lawsuit filed by the FTX estate, arguing that the
now-bankrupt crypto exchange is targeting the wrong party.
According to the court documents, Binance says FTX’s collapse stems from internal fraud,
not any action it or former CEO Changpeng Zhao took, and that the case fails to
meet basic legal standards.
Binance Rejects Claims, Deflects Blame
In a motion filed last week, Binance described FTX’s
case as “legally deficient” and lacking any plausible basis. The company
pointed to the conviction and 25-year sentence of FTX founder Sam
Bankman-Fried, calling the company’s downfall “one of the most massive corporate
frauds in history.”
Binance has asked a Delaware court to dismiss FTX’s $1.76bn asset recovery suit, calling it “legally untenable,” denying involvement in FTX’s collapse, and arguing the case lacks jurisdiction over the non-U.S. exchange.https://t.co/Tx4w2r7ap4 pic.twitter.com/pKwvMZAPAo
— Telo News (@Telo_Official) May 20, 2025
The FTX estate argues the firm was already insolvent
at the time and financed the deal using misappropriated customer funds. Binance
disputes the charge. It claims FTX continued to operate for over a year
following the deal, undermining any assertion of prior insolvency. The exchange also said the lawsuit failed to show that
Binance had any knowledge of the source of funds used in the transaction.
Read more: XRP Futures Debut on CME With $19M Volume on First Day, Driving ETF Speculation
FTX also accused Zhao of using Twitter to undermine
confidence in the company, pointing to a November 2022 post in which he said
Binance would sell its FTT holdings “due to recent revelations.” The suit
suggests that the tweet sparked a surge in withdrawals and a liquidity crisis at
FTX.
However, Binance argues that the tweet responded to public
reporting, not private knowledge. “The November 2022 tweets were posted in the
days following a report by CoinDesk,” Binance said, adding that the
complaint “contains no facts” indicating the posts were false or misleading.
Jurisdiction and Legal Boundaries Disputed
Binance further argues that the court lacks
jurisdiction over its foreign corporate entities. It said none of the
defendants are based in the U.S. or directly conducted the transfers in
question.
The clawback suit is one of many filed by the FTX
recovery trust to recoup assets following the firm’s high-profile
collapse. The bankruptcy left billions in customer funds missing and sent
shockwaves through the crypto industry.
This article was written by Jared Kirui at www.financemagnates.com.
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