CZ Claps Back: Binance Founder Changpeng Zhao Rejects FTX’s $1.8 Billion Shakedown
Binance's ex-CEO draws a line in the sand—FTX's billion-dollar demand gets a hard 'no.'
Who needs courtroom drama when crypto's biggest players write the script?
Meanwhile, traders shrug and keep stacking sats—because when elephants fight, the grass still grows (just don't ask who's fertilizing it).
TLDR
- Changpeng Zhao asks Delaware bankruptcy court to dismiss FTX’s $1.8 billion lawsuit against him and Binance
- FTX claims the 2021 share buyback deal used customer funds fraudulently transferred to Binance
- Zhao argues he lives in UAE and transactions happened outside US jurisdiction, making American laws inapplicable
- Zhao denies his social media posts about FTX contributed to the exchange’s collapse, calling FTX a “fraudulent enterprise”
- Two other former Binance executives have also filed dismissal motions in the same case
Former Binance CEO Changpeng Zhao has filed a motion to dismiss a $1.8 billion lawsuit brought by bankrupt crypto exchange FTX. The case centers on a 2021 share buyback deal that FTX claims was funded with misused customer assets.
FTX sued Zhao, Binance, and other former executives in November 2024. The lawsuit seeks to recover approximately $1.8 billion in cryptocurrency that FTX says was fraudulently transferred to Binance during the share repurchase agreement.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 🔶 BNB (@cz_binance) November 6, 2022
The bankrupt exchange, now controlled by lawyers working to maximize creditor returns, alleges that FTX and Sam Bankman-Fried knew they couldn’t afford the buyback. According to the lawsuit, they used customer funds to complete the deal anyway.
Zhao filed his dismissal request with a Delaware bankruptcy court on Monday. His lawyers argue that he should not be blamed for Bankman-Fried’s actions, describing the lawsuit’s claims as “nonsensical.”
The former Binance CEO currently lives in the United Arab Emirates. His legal team argues that Delaware courts lack jurisdiction over him due to his UAE residency.
Jurisdictional Arguments Take Center Stage
Zhao’s motion emphasizes the international nature of the disputed transactions. His lawyers state that every key part of the share buyback occurred outside the United States.
The Binance entities involved in the deal were based in Ireland, the Cayman Islands, and the British Virgin Islands. FTX’s related company, Alameda Ltd, was also incorporated in the British Virgin Islands.
The transaction used cryptocurrency rather than traditional currency. Specifically, it involved Binance USD, a stablecoin created by Binance, and FTX Token, which was created by FTX.
Zhao’s lawyers argue that relevant US statutes lack extraterritorial reach. They claim American bankruptcy laws should not extend to these offshore transactions.
The filing states that Zhao “was not a transferee” but served as a “nominal counterparty” in the transfer. His lawyers say plaintiffs have not alleged that Zhao received or controlled the exchanged cryptocurrency.
Social Media Posts Under Legal Scrutiny
FTX has also blamed Zhao’s social media activity for contributing to the exchange’s downfall. The company claims his posts were calculated to trigger customer withdrawals and destroy FTX.
In November 2022, CoinDesk reported that FTX’s holdings consisted mainly of FTT tokens. Following this report, Zhao posted on social media platform X that Binance was selling its FTT holdings.
Zhao also posted that Binance might acquire FTX to cover its financial shortfall. However, Binance quickly abandoned any acquisition plans after conducting due diligence.
Zhao’s legal team rejects claims that his posts caused FTX’s collapse. They argue that FTX was already a “fraudulent enterprise” before any social media activity.
His lawyers compare the situation to holding a whistleblower responsible for exposing a Ponzi scheme. They argue that even if Zhao’s posts affected the timing of FTX’s collapse, the company had no right to continue operating fraudulently.
Zhao is not alone in challenging the lawsuit. Two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, filed similar dismissal motions in July.
Binance itself sought dismissal of FTX’s lawsuit in May. The company called the suit “legally deficient” and blamed FTX’s collapse entirely on corporate fraud.
Both Zhao and Bankman-Fried have faced criminal charges. Zhao served four months in prison after pleading guilty to money laundering violations.
Bankman-Fried received a 25-year prison sentence in March 2024 for fraud and conspiracy charges related to FTX’s collapse. He has appealed his conviction, with a hearing scheduled for November 2025.