{"id":12263,"date":"2025-05-20T14:13:28","date_gmt":"2025-05-20T12:13:28","guid":{"rendered":"https:\/\/wsj-crypto.com\/?p=12263"},"modified":"2025-05-20T14:13:28","modified_gmt":"2025-05-20T12:13:28","slug":"binance-aims-to-quash-1-76-billion-ftx-lawsuit-attributes-downfall-to-sbfs-actions","status":"publish","type":"post","link":"https:\/\/wsj-crypto.com\/index.php\/2025\/05\/20\/binance-aims-to-quash-1-76-billion-ftx-lawsuit-attributes-downfall-to-sbfs-actions\/","title":{"rendered":"Binance Aims to Quash $1.76 Billion FTX Lawsuit, Attributes Downfall to SBF’s Actions"},"content":{"rendered":"

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Binance has submitted a motion to dismiss a $1.76 billion lawsuit initiated by the FTX estate, alleging that the collapsed crypto exchange is attempting to shift blame for its own downfall.<\/p>\n

Submitted<\/a> on May 16 in the Delaware Bankruptcy Court, Binance\u2019s legal representatives described the lawsuit as \u201clegally insufficient,\u201d asserting that FTX\u2019s downfall was not caused by market manipulation or malicious actions but by internal wrongdoing.<\/p>\n

\u201cPlaintiffs are acting as if FTX did not collapse due to one of the largest corporate frauds in history,\u201d the document stated, referencing Sam \u201cSBF\u201d Bankman-Fried\u2019s conviction on seven charges of fraud and conspiracy.<\/p>\n

FTX\u2019s estate contends that Binance obtained billions in cryptocurrency during a 2021 buyback agreement, funded inappropriately using customer funds.<\/p>\n

Binance disputes this assertion, claiming that \u201cFTX was a going concern for 16 months\u201d post the share buyback and that there was \u201cno credible assertion\u201d the exchange was insolvent at that period.<\/p>\n

Binance’s motion to dismiss FTX\u2019s lawsuit against the exchange. Source: Law360news<\/em><\/figcaption><\/figure>\n

Related: <\/strong><\/em>Binance requests arbitration for all participants in securities class suit<\/strong><\/em><\/a><\/p>\n

Zhao\u2019s tweet and FTT decline<\/h2>\n

The lawsuit further charges former Binance CEO Changpeng Zhao<\/a> with instigating a collapse via a tweet on Nov. 6, 2022, announcing the liquidation of FTT tokens.<\/p>\n

In its defense, Binance contended that Zhao\u2019s tweet was grounded in publicly available concerns. \u201cBinance\u2019s choice to liquidate its remaining FTT was indeed \u2018due to recent revelations\u2019\u2014specifically, the Nov. 2, 2022, CoinDesk article\u201d that disclosed Alameda Research\u2019s balance sheet.<\/p>\n

The company further justified Zhao\u2019s remark about Binance intending to minimize market impact. \u201cThe Complaint lacks any factual basis\u201d to demonstrate that Binance had no intention of proceeding with it.<\/p>\n

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CZ announced plans to liquidate FTT holdings in 2022. Source: CZ<\/em><\/figcaption><\/figure>\n

While contesting the court\u2019s jurisdiction, Binance indicated that none of the foreign entities mentioned \u201care incorporated or hold their principal business location in the United States,\u201d thus falling outside the court’s jurisdiction.<\/p>\n

The document also critiques the plaintiff\u2019s narrative as \u201ca collection of state law claims\u201d based on \u201csheer speculation\u2014much of it derived from a convicted fraudster\u2019s retrospective conjecture.\u201d<\/p>\n

Binance has requested the court to dismiss all claims with prejudice. The FTX estate has yet to respond. <\/p>\n

Related:\u00a0<\/strong><\/em>FTX EU creditors can now withdraw funds from Backpack exchange<\/strong><\/em><\/a><\/p>\n

FTX to distribute $5 billion in second phase of creditor repayments<\/h2>\n

FTX is poised to commence its second phase of repayments<\/a> to creditors more than two years following its bankruptcy filing.<\/p>\n

In a notice dated May 15, the FTX Recovery Trust declared that over $5 billion will be distributed starting May 30 through BitGo and Kraken, targeting entities in the second eligible category under the exchange\u2019s reorganization approach.<\/p>\n

According to the strategy, five creditor groups designated as \u201cconvenience classes\u201d are projected to receive between 54% and 120% of their claims. In total, FTX could repay up to $16 billion, contingent on the final tally of valid claims.<\/p>\n

Magazine:\u00a0<\/strong><\/em>Father-son duo lists Africa\u2019s XRP Healthcare on Canadian stock exchange<\/strong><\/em><\/a><\/p>\n