20-5-2025 – Binance, the globe’s preeminent cryptocurrency exchange, has moved to quash a $1.76 billion clawback lawsuit initiated by the beleaguered FTX estate, asserting that the claims lack both merit and jurisdiction. Court documents lodged with a Delaware judge on Friday reveal Binance’s staunch defence, dismissing accusations that it, alongside co-founder Changpeng Zhao, masterminded a nefarious plot to destabilise the now-defunct FTX platform.
The FTX estate’s grievance hinges on a 2021 transaction, wherein FTX repurchased a 20% equity stake from Binance, an early investor from 2019, using a mix of cryptocurrencies including BNB, BUSD, and its native FTT token. Bankruptcy administrators allege this deal was funded with illicitly obtained customer funds, asserting that FTX was already insolvent at the time. They further contend that Zhao’s public announcement on X in November 2022, declaring Binance’s intent to liquidate its FTT holdings, triggered a catastrophic wave of withdrawals that precipitated FTX’s collapse.
Binance’s legal team, however, paints a starkly different picture. They argue that FTX’s downfall stems not from their actions but from the egregious misconduct of its former chief, Sam Bankman-Fried, now serving a 25-year sentence for orchestrating what has been described as one of history’s most audacious corporate frauds. Court filings underscore that FTX continued operations for over 16 months post-transaction, and Binance challenges the estate’s assertion that Zhao’s statements on X were misleading or damaging, noting a lack of evidence to support such claims.
Further bolstering their defence, Binance maintains that the Delaware court lacks personal jurisdiction, given the exchange’s operations are based outside the United States and Zhao’s non-involvement in the share repurchase. The motion forms part of a broader saga as FTX’s estate strives to recover assets to settle debts exceeding $11 billion, with significant bankruptcy disbursements slated to commence on May 30.
This legal skirmish lays bare the intricate fallout from FTX’s implosion, with Binance resolute in deflecting blame from its doorstep, while the estate seeks to claw back funds to appease its creditors. The Delaware court’s ruling will likely cast a long shadow over the cryptocurrency landscape, as the industry grapples with the reverberations of FTX’s dramatic collapse.
