TLDR
- Binance wants to dismiss a $1.76 billion lawsuit from FTX.
- The lawsuit claims a 2021 buyback was funded fraudulently. Binance denies this.
- Binance says FTX’s collapse was due to internal mismanagement, not them.
- FTX pursues many lawsuits. Binance plans to fight and questions U.S. court power.
Global crypto exchange Binance has filed a motion to dismiss a $1.76 billion lawsuit initiated by the now-bankrupt exchange FTX.
The legal filing, made in a U.S. bankruptcy court on Tuesday, asserted that the claims made by FTX are “legally insufficient” and represent an attempt to deflect blame for the dramatic collapse of the once-prominent crypto platform.
FTX’s lawsuit, originally filed in November 2024, centered around a 2021 share buyback deal in which FTX repurchased Binance’s equity stake using digital assets, including FTT, BNB, and BUSD tokens. According to the plaintiffs, the transaction was allegedly funded with misappropriated customer deposits, making the buyback fraudulent from the outset.
Binance Denies Fraud Allegations
Binance, however, rejected these allegations. In court documents, the exchange argued that FTX’s claims lack legal merit and are a veiled effort to implicate external actors in its internal failures. Binance’s legal team pointed out that FTX continued to operate for over a year after the deal was completed and emphasized that Binance CEO Changpeng Zhao, popularly known as CZ, had no direct involvement in the execution of the transaction.
“FTX is trying to rewrite history and shift responsibility for its collapse onto third parties,” Binance’s legal filing read.
The company also stressed that Zhao’s statements on social media, particularly his now-infamous tweet about selling off FTT tokens, were not malicious but rather part of standard business conduct. The tweet, which triggered a massive withdrawal of funds from FTX and a liquidity crisis, has been cited by FTX lawyers as a deliberate attempt to undermine the competitor.
Meanwhile, FTX’s legal team maintains that the 2021 deal was carried out under fraudulent circumstances, asserting that both FTX and its sister trading firm Alameda Research were likely insolvent at the time. They further claim Zhao’s public comments ahead of the FTX crash were “calculated” to damage the exchange’s reputation and cause a bank run.
Binance Points to FTX’s Internal Failures
In response, Binance contended that the accusations are not only unfounded but also irrelevant to the core issue, FTX’s internal mismanagement. The exchange noted that FTX founder Sam Bankman-Fried has already been convicted and sentenced to 25 years in prison for orchestrating one of the largest financial frauds in recent memory.
Notably, FTX has already launched over 20 separate lawsuits in a broad effort to recover assets from various entities and individuals it had dealings with. Targets include exchanges like Crypto.com, political donors, and investment firms such as SkyBridge Capital. The company is pursuing over $1.8 billion from Binance alone, arguing that it represents the value of assets transferred during the 2021 deal.
Binance responded firmly to these claims, calling them “baseless” and affirming that it will “vigorously defend itself in court.” The exchange also argues that because it is not headquartered in the United States, it should not be subject to the jurisdiction of U.S. bankruptcy courts.
FTX’s Broader Legal Strategy
Meanwhile, FTX’s restructuring team continues to claw back assets in a bid to maximize creditor recovery. As part of its reorganization plan approved earlier this year, over 98% of eligible creditors are expected to receive at least 118% of their claim value, calculated at the time of the bankruptcy filing. FTX has also withdrawn some suits as part of settlements, including a $228 million agreement with Bybit.
