CZ Fights Back: Binance Founder Moves to Dismiss FTX’s $1.76B Clawback Lawsuit in Delaware

Binance's former CEO Changpeng 'CZ' Zhao isn't going down without a fight. His legal team just filed to toss FTX's $1.76 billion clawback suit—Delaware's latest crypto courtroom drama.

The move comes as bankrupt FTX desperately tries to recoup funds from pre-collapse transactions. CZ's lawyers likely argue these were legitimate trades, not fraudulent transfers—but when has logic ever stopped a bankruptcy fire sale?

This high-stakes legal chess match could set precedents for crypto bankruptcies. Either way, lawyers are the real winners—billable hours don't care about bear markets.

Jurisdictional challenge and defense

Zhao’s legal team said he lives in the United Arab Emirates and has no meaningful ties to Delaware or the United States. The motion claims that U.S. bankruptcy law doesn’t apply to the alleged transfers, which were not domestic, and that serving U.S. legal counsel on a foreign party is not sufficient under the law.

Zhao described himself as a “nominal counterparty” in the transaction and said the complaint attempts to unfairly hold him responsible for FTX’s internal failures. Two former Binance executives named in the same case, Samuel Wenjun Lim and Dinghua Xiao, also filed to be removed from the suit last month.

FTX collapse legal battles

This is one of several legal confrontations to arise from FTX’s 2022 collapse. FTX’s bankruptcy estate sued Binance and Zhao in 2024, seeking to recover funds and alleging reputational harm.

CZ himself has faced legal troubles, pleading guilty to U.S. anti-money laundering violations and serving a four-month sentence, while Sam Bankman-Fried is serving 25 years for fraud.