Binance Pushes Back Against FTX Lawsuit, Calls Claims “Baseless”

Binance is seeking to dismiss a $1.76 billion lawsuit filed by the FTX estate, arguing that the legal action is an attempt to rewrite the story of FTX’s own collapse.

In a motion submitted to Delaware Bankruptcy Court on May 16, Binance stated that the now-defunct exchange is “ignoring the reality” of its downfall — a massive internal fraud scandal led by founder Sam Bankman-Fried, who is now convicted on multiple criminal counts. The crypto giant called the case “legally groundless” and accused FTX’s estate of building its claims on speculation and selective hindsight.

The lawsuit alleges that Binance unfairly benefited from a 2021 share repurchase funded by misappropriated customer assets and that CEO Changpeng Zhao (CZ) triggered FTX’s downfall with a 2022 tweet about liquidating FTT tokens.

Binance denies wrongdoing on both fronts, pointing to the 16-month gap between the buyback and FTX’s collapse, and arguing that Zhao’s tweet was based on widely publicized financial concerns raised by CoinDesk.

READ MORE:

Bitcoin Market Patterns Suggest Another Consolidation Phase May Be Near

Moreover, Binance contends that the Delaware court lacks jurisdiction, as the entities named in the suit are based outside the U.S. and thus fall beyond its legal reach. The company has asked the court to throw out the case entirely.

Meanwhile, FTX continues its bankruptcy resolution. The estate announced it will begin a second round of creditor repayments totaling over $5 billion starting May 30. The funds will be distributed through BitGo and Kraken, targeting convenience class creditors, with payouts expected to range between 54% and 120% of the original claims.

Alexander Stefanov