Binance Submits Motion to Dismiss FTX’s $1.76 Billion Clawback Lawsuit
Binance, recognized as the largest cryptocurrency trading network globally, has sought to dismiss a clawback lawsuit totaling $1.76 billion initiated by the estate of the now-defunct FTX exchange.
In legal documents submitted on Friday (May 16), Binance contends that the allegations are unfounded and asserts that the court possesses no jurisdiction over the matter.
🚨 BREAKING: Binance moves to dismiss FTX’s $1.76B lawsuit, calling it “legally deficient.”
FTX accused of deflecting from its collapse due to fraud. CZ’s FTT liquidation blamed!
Will the court agree? 🤔#Binance #FTX #CryptoNews
— Glowing AxolHodl (@GlowingAxo) May 20, 2025
Binance Claims FTX’s Legal Team is Trying to Divert Blame Away From FTX Founder Sam Bankman-Fried
In the legal documents from last week, Binance asserts that the FTX legal counsel is misrepresenting Binance and its co-founder, Changpeng Zhao, as the architects of a plot aimed at sabotaging the defunct exchange.
Binance filed the legal documents with a Delaware judge late last week, asserting that FTX is simply looking to shift the blame for its downfall onto another entity.
Binance suspects that the FTX legal team is maneuvering to evade accountability for former CEO Sam Bankman-Fried, who was deemed the main conspirator. Bankman-Fried was sentenced to 25 years in federal prison last year in a protracted case described by prosecutors as ‘one of the largest corporate frauds in history’.
The $1.76 billion clawback dispute has a substantial background, stemming from a 2021 deal in which FTX repurchased a 20% share previously owned by Binance.
The buyback was intricate, involving a combination of digital currencies such as BNB, BUSD, and FTX’s native crypto token, FTT. In November 2022, amid swirling rumors of FTX’s financial instability, CZ announced on X that Binance would be liquidating its FTT holdings.
Binance just decided to exit #FTX & #FTT!!!
🚨🚨🚨🚨🚨🚨 pic.twitter.com/dW9bwDBYir
— Duo Nine ⚡ YCC (@DU09BTC) November 6, 2022
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FTX Estate Argues CZ’s Public Statements Contributed to Its Demise
This is where the FTX estate alleges that both Binance and CZ played key roles in FTX’s downfall, asserting that public remarks from CZ triggered a wave of withdrawals that sealed the exchange’s fate.
The counterclaim from Binance highlights that FTX operated for over 16 months following the 2021 buyback transaction, and the lawsuit failed to show any falsehood in CZ’s statements.
Furthermore, Binance’s legal representatives position that the court lacks personal jurisdiction, noting that Binance operates from outside the US and CZ was not involved in the buyback transaction directly.
This enduring legal conflict is part of broader attempts by the FTX estate to recuperate funds for its creditors. Victims of the FTX collapse are owed more than $11 billion, with indications that the recovery estate plan will initiate substantial creditor distributions on May 30.
The entire crypto community will be observing the market’s response on May 30. After years of legal troubles, many investors stand to finally receive compensation, potentially infusing billions of new liquidity back into the markets.
A significant number of creditors being compensated as June approaches are experienced traders and investors who experienced losses due to the FTX collapse.
Interestingly, the FTT token has increased by 1.5% daily and is currently priced at $1.22. According to CoinGecko, it still holds a crypto market capitalization of $400 million despite lacking use. Even more astonishing is its trading volume, exceeding $15 million in the past 24 hours alone.
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