Binance Rejects FTX’s $1.76 Billion Restitution Lawsuit, Calls It “Legally Flawed”
Binance Holdings Ltd. has filed a motion asking a Delaware bankruptcy court to dismiss a $1.76 billion lawsuit filed by FTX, calling it “legally flawed” and completely without factual basis. The world’s largest exchange claims that FTX is attempting to blame its own collapse on internal fraud by targeting competitors like Binance.
In a motion filed Friday, Binance said there is no evidence that it or former CEO Changpeng Zhao (CZ) were involved in FTX’s collapse. Instead, it stressed that the main cause was “one of the largest corporate frauds in history” perpetrated by FTX’s leadership, led by Sam Bankman-Fried. Bankman-Fried is currently serving a 25-year prison sentence after being convicted of defrauding customers and investors.
FTX’s lawsuit, filed in November 2024, seeks to recover approximately $1.76 billion in cryptocurrency that the platform transferred to Binance in July 2021 as part of a share buyback. However, Binance argues that FTX remained a fully operational business for the next 16 months at that time — making its pre-existing insolvency argument less credible.
Binance also denies that CEO CZ intentionally triggered a wave of withdrawals with a tweet on November 6, 2022, in which he said Binance would liquidate all of its FTT tokens. “The tweets were made after a bombshell CoinDesk article exposed FTX’s precarious financial situation. The complaint does not present any evidence that the statements were false or misleading,” Binance wrote in the filing.
Binance also objected to U.S. jurisdiction over the case, arguing that none of the defendants were based in the United States or directly involved in the transactions alleged in the complaint. The company said the court has no legal basis to adjudicate foreign entities.
FTX previously sold a 20% stake to Binance in 2019 and repurchased it in 2021 for a portion of its BNB, BUSD, and FTT tokens. FTX claims that the transaction used undisclosed customer funds — a practice Binance has categorically denied.
Meanwhile, Binance has also faced internal difficulties recently. An employee has been suspended for allegedly using confidential information from his time at BNB Chain to trade ahead of the token launch, an act that is considered internal fraud. Binance said it conducted an internal investigation and discovered the purchase of tokens through multiple wallets for profit.
Meanwhile, former CEO Changpeng Zhao – once a symbol of Binance – is currently serving a four-month prison sentence in the US after pleading guilty to money laundering violations, as part of a $4.3 billion settlement between him, Binance and the US government.
The FTX lawsuit is just one of several attempts by the FTX Recovery Trust to recover assets lost after the historic bankruptcy, which cost billions of dollars in customer funds. However, with Binance strongly opposing the case, the legal process is expected to be long and complicated.