CZ Requests Dismissal of “Irrational” $1.76B FTX Clawback Lawsuit

The previous CEO of Binance, Changpeng ‘CZ’ Zhao, has submitted a request to dismiss a lawsuit from FTX that seeks to retrieve almost $1.8 billion.

On November 10, 2024, FTX, led by Sam Bankman-Fried, initiated legal action against Binance and CZ. This lawsuit demands compensation, alleging that Binance significantly contributed to its downfall.

Nonetheless, a filing on Zhao’s behalf dated August 4, 2025, states that “Plaintiffs absurdly hodl Mr. Zhao and others responsible for Mr. Bankman-Fried’s shortcomings.”

Zhao describes the accusation as “legally unfounded” and “completely incoherent.” His legal representatives emphasized that “although Plaintiffs and Binance were competitors, they were also momentarily business partners when the Binance Defendants owned approximately a 20% stake in FTX Trading. However, Zhao and Bankman-Fried were unable to collaborate effectively, leading to their separation.”

BREAKING: Binance co-founder CZ seeks to exit the $1.8B FTX lawsuit.

He has just informed the US court that it lacks jurisdiction over him as he resides in the UAE and the case pertains to offshore agreements.

If this is upheld, CZ might emerge unscathed. pic.twitter.com/wBdQw7YRdb

— Crypto Patel (@CryptoPatel) August 6, 2025

Explore: FTX Declares War On Binance And Zhao For Triggering A Available volume Crises

FTX Lacks Jurisdiction Over UAE Citizen CZ

The principal argument from Zhao’s legal team is that the US court has no jurisdiction over Zhao, as he is a citizen and resident of the United Arab Emirates (UAE). The motion argues that the case is largely disconnected from the US, with all transactions and parties involved being offshore.

Zhao’s attorneys also asserted that he was not a direct beneficiary of the funds in question.

The legal representatives characterized CZ as a “nominal counterparty” in the transaction, indicating he did not exercise personal possession or control over the exchanged crypto asset. The transaction included Binance (BUSD) and FTX coin (FTT).

On the other hand, FTX, which is currently overseen by a team focused on repaying creditors, claims that the 2021 share buyback was financed with customer funds, amounting to a fraudulent transfer.

DISCOVER: Best Meme Token ICOs to Invest in 2025

FTX Declares War On Binance And Zhao For Triggering A Available volume Crises

FTX was previously one of the largest digital currency platforms globally, but it declared bankruptcy in November 2022. Disclosures of financial mismanagement and fraud are the primary causes behind its demise.

Crucially, the company’s failure resulted in billions of dollars in losses for investors and eroded public trust in digital currencies.

The lawsuit charges Binance and its former CEO Changpeng Zhao with taking measures that intensified FTX’s financial woes.

Specifically, FTX alleges that Binance’s decision to liquidate a significant percentage of its FTT holdings—FTX’s native token—triggered a market fluidity crunch that ultimately led to FTX’s downfall. In early November 2022, Zhao publicly declared that Binance would sell its entire FTT position citing “recent revelations” regarding FTX’s financial condition.

Related : Former FTX Exec Nishad Singh Gets No Jail Time, Ordered To Forfeit $11 Billion

The post CZ Seeks Dismissal Of “Nonsensical” $1.76B FTX Clawback Lawsuit appeared first on 99Bitcoins.