- Changpeng Zhao requests the dismissal of FTX lawsuit.
- Lawsuit seeks $1.8 billion from Binance.
- Jurisdictional and legal arguments cited by Zhao’s team.
Binance co-founder Changpeng “CZ” Zhao has filed a motion in the US Bankruptcy Court to dismiss a $1.8 billion lawsuit initiated by the FTX bankruptcy estate.
The case highlights jurisdictional challenges in international crypto transactions and carries potential implications for cross-border recovery efforts in crypto bankruptcies.
Binance co-founder Changpeng “CZ” Zhao has filed a motion to dismiss a nearly $1.8 billion lawsuit initiated by the FTX bankruptcy estate. The complaint alleges that FTX improperly transferred funds to Binance. This legal move follows a 2021 share buyback between the entities.
CZ argued the U.S. bankruptcy court lacks jurisdiction over him, as he resides in the UAE and engages in offshore deals. His legal team labeled the claims against Zhao as “legally unfounded” and “incoherent” in court filings. “Plaintiffs nonsensically blame Mr Zhao and others for Mr Bankman-Fried’s failings” and described the claims as “legally unfounded” and “outright incoherent.” source
Financial markets and affected tokens observed no immediate liquidity shifts following this motion. Binance has labeled the lawsuit’s claims meritless. The court’s evaluation of this jurisdictional argument is now awaited.
Financial implications for Binance are significant given the lawsuit’s scale, while FTX creditors seek recovery funds. The outcome may set precedents for future cryptocurrency bankruptcy scenarios.
On-chain data shows no significant TVL changes directly linked to the lawsuit. Historical legal actions reflect clawbacks can span years, often affecting reputations but seldom shifting major cryptocurrency markets immediately.
If successful, the dismissal could minimize regulatory pressure on Binance while maintaining CZ’s business positioning.
Industry experts suggest this case could influence regulatory approaches towards cross-border cryptocurrency transactions.
