binance Challenges FTX’s $1.76 Billion Lawsuit in Court
Binance adn its former CEO, Changpeng Zhao, have asked a Delaware court to dismiss a $1.76 billion lawsuit filed by FTX’s bankruptcy lawyers. This is the latest growth in the aftermath of the FTX collapse.
In their court filing dated May 16, Binance argued against the lawsuit on grounds of jurisdiction and duty. They believe the court lacks jurisdiction because the involved FTX entities are based outside the U.S., in places like the Cayman Islands and Ireland.They also argue that FTX alone caused its downfall.
The lawsuit was initiated by FTX’s Recovery Trust.It aims to recover assets paid to Binance in July 2021 for buying back equity. Binance believes these funds are protected under bankruptcy law’s “safe harbor” clause due to being part of a securities contract.
FTX claims that Binance and Zhao contributed to their collapse through social media posts. However, Binance states these posts were truthful and any claim of malicious intent is speculative. They also pointed out the lawsuit itself highlights FTX leadership’s “pervasive malfeasance.”
