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Zameer Attar
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Anjali Belgaumkar
Writer by choice, CryptoCurrency Writer, and Researcher by chance. Currently, focusing on financial news and analysis, as well as cryptocurrency news and data. One may not call me a crypto “Enthusiast” but trust me I'm getting there.
- Aug 06, 2025 07:04 UTC
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Crypto News Today: Binance Founder Says FTX’s $1.7B Lawsuit Doesn’t Belong in US Courts
Zhao says that $1.7 billion recovery lawsuit filed by FTX Trust does not belong to US court of bankruptcy.
He claims that the entire case is extraterrestrial and considers himself a nominal party.
Co-founder and former CEO of Binance, Changpeng Zhao, has requested Delaware Bankruptcy Court to dismiss a $1.7 billion recovery lawsuit filed by FTX Trust. He said that the US has no right to come after him over the clawback claim.
Changpeng Zhao Fires Back At FTX Bankruptcy Estate
The defunct crypto exchange, FTX, filed a suit against Binance and its former CEO in November 2024, to pull back the cash that it claims was improperly moved by Sam Bankman-Fried, before the company collapsed. However, CZ says these claims are nonsensical.
“The trust and FTX Digital Markets nonsensically blame Zhao and Binance for Bankman-Fried’s pervasive malfeasance,” the filing said. CZ added that he was only a “nominal counterparty” in the transaction, meaning he wasn’t even the main party behind the deal.
CZ’s lawyers also pointed out that U.S. bankruptcy laws don’t definitively cover foreign transfers, especially when the transaction is related to securities contracts that fall under safe harbor protection.
“The constructive fraud claims also don’t meet legal requirements under safe harbor provisions,” the motion added.
Changpeng’s Defence Claims the Case “Extraterrestrial”
Zhao’s lawyers argued that CZ resides in the United Arab Emirates (UAE) and being a foreign citizen makes him untouchable by the US courts.
“The claims are so far removed from Delaware, and even the United States, that the statutes at issue, which lack extraterritorial application, do not even apply,” CZ wrote in the filing.
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CZ also argues that the entire transaction was offshore, meaning Binance legal entities are incorporated in Ireland, the Cayman Islands, and the British Virgin Islands. Therefore, the US law does not apply to these places, making the entire transaction extraterrestrial.
“The trust and FTX Digital Markets Ltd. can’t allege facts that Zhao was ‘at home’ under Delaware’s jurisdiction,” CZ’s defence added.
Binance and FTX Partnership
Moreover, the filing also points out that Binance and FTX were only “briefly business partners.” CZ said Binance held 20% stakes at FTX, but things ended quickly after some “personal grievances.”
Two former executives, Samuel Wenjun Lim and Dinghua Xiao, even urged the court in July to dismiss them from the suit. They are calling it a stretch.
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FAQs
FTX Trust filed a $1.7 billion clawback lawsuit to recover cash it claims was improperly transferred by Sam Bankman-Fried before FTX collapsed.
Binance was an early investor, holding a 20% stake in FTX. The lawsuit concerns the repurchase of this stake by FTX.
He claims he was not the main party in the deal. He blames Sam Bankman-Fried for the malfeasance, not Binance or himself.
Yes 
No 
