Regulation & Policy
Share
Changpeng Zhao, founder and former CEO of Binance, has filed a motion to dismiss a $1.76 billion lawsuit brought against him, Binance, and other executives by the FTX bankruptcy estate. Zhao’s legal team argues that U.S. courts lack jurisdiction over him and that he was improperly served.
In a filing submitted Monday to the Delaware Bankruptcy Court, Zhao—who resides in the United Arab Emirates—contended that the lawsuit is procedurally flawed and legally baseless. His lawyers maintain that Delaware courts have no personal jurisdiction because Zhao has no meaningful ties to the state. “Mr. Zhao is not amenable to suit in this forum, and the statutes Plaintiffs seek to enforce do not reach the extraterritorial transactions described in the Complaint,” the motion states.
Zhao’s filing also claims the allegations are “legally unfounded” and, in some cases, “outright incoherent.” The motion aligns with similar dismissal requests submitted by other Binance executives in July.
The lawsuit stems from a July 2021 equity repurchase deal, where FTX bought back Binance’s 20% stake in the exchange. According to the complaint, FTX—led by Sam Bankman‑Fried—used a combination of FTX‑issued FTT tokens and Binance’s BUSD stablecoin to finance the buyback. The FTX bankruptcy estate, now overseen by a restructuring team, claims the transaction was fraudulent and seeks to recover the $1.76 billion to repay creditors affected by FTX’s collapse in 2022.
Disclaimer of Warranty
The information provided in this article is for general informational purposes only. We make no warranties about the completeness, reliability, and accuracy of this information. Read full disclaimer
FTX’s legal team alleges the assets used in the buyback were misappropriated from customer deposits. Testimony from Caroline Ellison, former CEO of Alameda Research, during Bankman‑Fried’s trial suggested that Alameda borrowed over $1 billion from customer funds to complete the deal.
Zhao’s legal team argues that he was not the recipient of the disputed funds. “Plaintiffs in fact show that Mr. Zhao was not a transferee,” the motion notes, asserting he was merely a nominal counterparty in the transaction and a nominal signatory, not the actual beneficiary of the assets transferred.
Beyond the buyback, the FTX estate accuses Zhao of contributing to FTX’s downfall. A November 2022 tweet from Zhao—announcing Binance’s decision to liquidate its FTT holdings—triggered a wave of withdrawals from FTX, leading to a liquidity crisis that preceded its bankruptcy.
FTX founder Sam Bankman‑Fried was sentenced in March 2024 to 25 years in prison for fraud, conspiracy, and money laundering. Zhao himself served a four‑month sentence in the U.S. in 2024 after pleading guilty to anti‑money laundering violations as part of a $4.3 billion settlement with U.S. regulators. His resignation as Binance CEO was part of the settlement terms.
This legal battle marks the latest clash between two of crypto’s most high‑profile figures, as Binance and the FTX bankruptcy estate continue to dispute the 2021 buyback and its role in the chain of events that led to FTX’s historic collapse.
Editor's Picks
IMF Backs Tokenized Finance but Still Holds On to Legacy Control
Walid Abou Zaki
Apr 5, 2026
7 min
Franklin Templeton’s 250 Digital Deal Signals a Shift Toward Active Crypto Management
Walid Abou Zaki
Apr 1, 2026
5 min
VARA Introduces Virtual Asset Derivatives Framework As Dubai Deepens Market Maturity
Walid Abou Zaki
Mar 31, 2026
7 min
Read More Articles
In the Same Space
White House Study Reframes Stablecoin Yield Fight as CLARITY Act Nears Its Defining Test
Salma Naueihed
Apr 9, 2026
8 min
FDIC Proposes Stablecoin Issuer Rule Under GENIUS Act
News Desk
Apr 8, 2026
4 min
VARA Granted RIV a License, as Attention Turns to the Broader Structure
Walid Abou Zaki
Apr 7, 2026
5 min
SEC Crypto “Safe Harbor” Proposal Advances to White House Review
News Desk
Apr 7, 2026
3 min
