Binance Rejects FTX Lawsuit, urging a Delaware bankruptcy court to dismiss a $1.76 billion claim by the collapsed exchange FTX. Filed in November 2024, FTX’s suit accuses Binance and former CEO Changpeng Zhao (CZ) of fraudulent transactions that contributed to its downfall. Binance calls the allegations baseless, aimed at deflecting blame from FTX’s convicted ex-CEO, Sam Bankman-Fried (SBF). This article explores Binance’s defense and the ongoing crypto litigation in the blockchain industry.
Binance Challenges FTX’s Claims
Binance Rejects FTX Lawsuit, arguing the $1.76 billion suit lacks legal grounding and serves to shift responsibility from SBF, currently serving a 25-year sentence for fraud. FTX alleges that in July 2021, SBF fraudulently transferred funds to repurchase a 20% stake from Binance, using customer deposits worth $1 billion without disclosure. The transaction involved a mix of BNB tokens, BUSD stablecoins, and FTX’s FTT tokens.
Binance counters that FTX operated normally for 16 months post-deal, with no evidence of illegality. It also refutes claims that CZ’s November 2022 tweet, announcing the sale of Binance’s FTT holdings, triggered market panic. Binance notes the tweet followed a CoinDesk report exposing FTX’s financial instability, stating, “No evidence proves our statements were false.” This defense underscores the volatile dynamics of the crypto exchange market.
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Jurisdictional and Procedural Arguments
Binance Rejects FTX Lawsuit, asserting that the Delaware court lacks jurisdiction, as the defendants, including Binance and CZ, are non-U.S. residents and the transaction occurred outside U.S. borders. This jurisdictional challenge aims to nullify the case, relieving Binance of liability in the crypto litigation surrounding FTX’s collapse.
FTX’s lawsuit is part of a broader effort to recover over $11 billion to repay creditors, with asset distribution set to begin May 30, 2025. The suit claims the 2021 deal was funded by 60% customer funds, rendering it a fraudulent transfer during FTX’s insolvency.
Implications for the Crypto Industry
Binance Rejects FTX Lawsuit, highlighting tensions in the blockchain industry as failed exchanges seek scapegoats. If the court dismisses the case, Binance avoids financial and legal repercussions, reinforcing its position as a leading crypto exchange. However, if the motion to dismiss is denied, the case could enter discovery and settlement talks, prolonging the dispute.
Online discussions reflect divided sentiments: some view FTX’s suit as a desperate bid to offset losses, while others question Binance’s role in FTX’s liquidity crisis. The crypto market, currently bullish with altcoins up 30–100% in 2025, watches closely, as the outcome could influence trust and regulatory scrutiny.
Conclusion
Binance Rejects FTX Lawsuit, seeking to dismiss a $1.76 billion claim tied to a 2021 deal. Labeling the suit a deflection from FTX’s mismanagement, Binance challenges its legal and jurisdictional basis. As the Delaware court deliberates, the case underscores the complexities of crypto litigation and its impact on the blockchain industry’s future.