CZ Requests Dismissal of FTX’s $1.76 Billion Clawback Lawsuit

Changpeng “CZ” Zhao, CEO of Binance, has filed a request with a U.S. bankruptcy court to dismiss FTX’s $1.76 billion clawback lawsuit. The lawsuit centers around a July 2021 share repurchase deal between FTX and Binance, in which FTX allegedly sent $1.76 billion to buy back equity from Binance via Alameda Research.

Foreign Transactions and Jurisdictional Challenge

Zhao’s legal team argues that the deal was conducted entirely through foreign entities, including firms in the British Virgin Islands, Ireland, and the Cayman Islands, placing it outside the reach of U.S. statutes. They claim that the U.S. bankruptcy court lacks jurisdiction over a foreign resident involved in offshore transactions.

Defense and Nominal Counterparty

Zhao describes himself as a “nominal counterparty” in the transaction and claims that the complaint attempts to unfairly hold him responsible for FTX’s internal failures. He argues that he has no meaningful ties to Delaware or the United States and that serving U.S. legal counsel on a foreign party is not sufficient under the law.

FTX Collapse Legal Battles

This is not the only legal confrontation 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. Sam Bankman-Fried, the former CEO of FTX, is currently serving a 25-year sentence for fraud.

Related Legal Cases

Two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, also filed to be removed from the suit last month. The legal battles surrounding FTX’s collapse continue to unfold, with multiple parties involved in various lawsuits and legal disputes.

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