Changpeng Zhao, co-founder and former CEO of Binance, filed a motion to dismiss a $1.7 billion lawsuit brought by the FTX bankruptcy estate.
Changpeng Zhao's Response to FTX
The defunct cryptocurrency exchange, FTX, filed a lawsuit against Binance and its former CEO in November 2024, seeking to reclaim funds that they allege were improperly transferred by Sam Bankman-Fried prior to the company's collapse. Zhao described the claims as nonsensical.
"The trust and FTX Digital Markets nonsensically blame Zhao and Binance for Bankman-Fried’s pervasive malfeasance," the filing said.
Zhao's Defense Claims 'Extraterrestrial' Jurisdiction
Zhao’s lawyers assert that he resides in the United Arab Emirates, making him a foreign citizen outside the reach of US courts.
"The claims are so far removed from Delaware, and even the United States, that the statutes at issue, which lack extraterritorial application, do not even apply," Zhao noted in the filing.
The defense pointed out that the entire transaction was offshore, hence Binance legal entities are incorporated in Ireland, the Cayman Islands, and the British Virgin Islands.
Binance and FTX Partnership
Moreover, the filing indicates that Binance and FTX were only "briefly business partners." Zhao stated that Binance held a 20% stake in FTX, but their relationship ended quickly due to some 'personal grievances.' Two former executives, Samuel Wenjun Lim and Dinghua Xiao, previously urged the court to dismiss them from the lawsuit, describing it as a stretch.
The situation surrounding the FTX lawsuit and Changpeng Zhao's response illustrates the complexities and legal nuances faced by major players in the cryptocurrency market.
