Key Takeaways
- Changpeng Zhao motioned to dismiss a $1.76B FTX trust claim.
- Zhao argued he is not subject to U.S. jurisdiction as a resident of the UAE.
- His motion follows similar dismissal requests from Samuel Wenjun Lim and Dinghua Xiao, two former Binance executives.
Legal disputes tied to the FTX collapse continue to unfold, with a focus now shifting to cross-border jurisdiction issues.
One of the latest developments involves Binance co-founder Changpeng Zhao (CZ), who seeks to dismiss a “nonsensical” claim against him on jurisdictional grounds.
Top Trending Crypto Articles
CZ Fights $1.76B FTX Clawback
CZ has asked a Delaware bankruptcy court to dismiss a $1.76 billion claim from the FTX trust.
In a motion filed on Monday, CZ called the case “nonsensical” and said he is a resident of the United Arab Emirates and not “at home” in Delaware, where the suit was filed.
He also claimed the transactions at issue were entirely extraterritorial, involving entities incorporated in the British Virgin Islands, Ireland, and the Cayman Islands, and thus fall outside the scope of U.S. bankruptcy law.
CZ argued he was only a “nominal counterparty” in the 2021 share repurchase deal with Sam Bankman-Fried, through which Binance allegedly received the contested funds.
According to him, the trust and FTX Digital Markets are wrongfully blaming Binance and its executives for Bankman-Fried’s “pervasive malfeasance“ that led to FTX’s collapse.
CZ also highlighted that Binance’s brief partnership with FTX ended over “personal grievances,“ with Binance exchanging its 20% stake for crypto assets.
FTX Trust Faces Pushback From Binance Over Fraud Allegations
CZ’s motion is the latest in a series of efforts by Binance-affiliated executives to distance themselves from FTX’s fallout.
Former executives Samuel Wenjun Lim and Dinghua Xiao also filed motions in July seeking dismissal from the same suit.
The FTX trust alleges Binance and its executives received improper transfers from Alameda Ltd., a BVI-based entity, as part of the disputed equity deal.
CZ’s legal team argues that the fraud and constructive fraud claims do not meet legal thresholds.
It also said that U.S. safe harbor provisions for securities contracts don’t apply. Then, the court shouldn’t extend them to foreign transactions.
Additionally, the motion asserts that serving U.S. counsel on a foreign defendant is improper, making the complaint procedurally invalid.
However, the case FTX Digital Mkts. Ltd. v. Binance Holdings Ltd. continues in the U.S. Bankruptcy Court for the District of Delaware.
Top Trending Crypto Articles
Giuseppe Ciccomascolo began his career as an investigative journalist in Italy, where he contributed to both local and national newspapers, focusing on various financial sectors.
Upon relocating to London, he worked as an analyst for Fitch's CapitalStructure and later as a Senior Reporter for Alliance News. In 2017, Giuseppe transitioned to covering cryptocurrency-related news, producing documentaries and articles on Bitcoin and other emerging digital currencies. He also played a pivotal role in establishing the academy for a cryptocurrency exchange website. Crypto remained his primary area of interest throughout his tenure as a writer for ThirdFloor.
