Binance Seeks Dismissal of $1.76 Billion FTX Lawsuit
Binance filed a motion on May 16 to dismiss a $1.76 billion clawback lawsuit from the FTX estate in a Delaware bankruptcy court.
Key Points of Binance's Motion
- Binance claims the lawsuit is “legally deficient” and based on speculation.
- The dispute centers around a 2021 transaction where FTX repurchased Binance’s 20% equity stake using various crypto assets.
- The FTX estate alleges that this deal involved misappropriated customer funds and that FTX was insolvent at that time, which Binance denies.
- The lawsuit accuses Binance of being unjustly enriched and playing a role in FTX’s collapse.
- It alleges that Binance CEO Changpeng Zhao's tweet about liquidating FTT holdings triggered mass withdrawals from FTX.
Response from Binance
- Binance argues that FTX operated for 16 months post-repurchase, disputing the claim that the deal caused its downfall.
- Binance asserts that Zhao's tweet was a response to legitimate market concerns and not a malicious act.
- Binance accuses the FTX estate of shifting blame onto external parties rather than addressing internal failures.
Sam Bankman-Fried, former CEO of FTX, was sentenced to 25 years in prison for fraud-related charges earlier this year.