Binance’s CZ Seeks to Dismiss $1.76B FTX Clawback Lawsuit

Changpeng “CZ” Zhao, Binance’s co-founder, has filed a motion to dismiss a $1.76 billion lawsuit from FTX’s bankruptcy estate, escalating tensions in the crypto industry. Filed on August 4, 2025, in Delaware’s U.S. Bankruptcy Court, CZ’s motion argues that the court lacks jurisdiction over him as a UAE resident and that the 2021 share repurchase deal, central to the lawsuit, involved offshore transactions not subject to U.S. bankruptcy law.

FTX’s estate claims that in July 2021, Sam Bankman-Fried, now serving a 25-year sentence for fraud, used insolvent Alameda Research funds to repurchase Binance’s 20% stake in FTX’s global unit and 18.4% in its U.S. entity, valued at $1.76 billion in FTT, BNB, and BUSD tokens. The lawsuit alleges this was a fraudulent transfer, harming FTX creditors who lost $11 billion. FTX also accuses CZ of posting misleading tweets in November 2022, triggering a $529 million FTT sell-off that destabilized FTX.

CZ’s filing calls the claims “nonsensical,” asserting he was a nominal counterparty in the deal and that FTX’s collapse stemmed from internal mismanagement, not Binance’s actions. Binance vows to “vigorously defend” itself, labeling the allegations meritless. Other Binance executives, Samuel Lim and Dinghua Xiao, also sought dismissal in July.

The crypto community is divided, with some supporting FTX’s creditor recovery efforts and others viewing the lawsuit as a strategic attack on a rival. Legal experts note that proving fraudulent intent in cross-border deals is challenging. The court’s ruling, expected soon, could impact Binance’s operations and FTX’s creditor payouts, highlighting ongoing regulatory and competitive strains in crypto.