FTX Lawsuit Against Binance, seeking $1.76 billion, has prompted a strong rebuttal from Binance, which urges a Delaware bankruptcy court to dismiss the case as baseless. Filed in November 2024, the suit accuses Binance and former CEO Changpeng Zhao (CZ) of contributing to FTX’s collapse through fraudulent transactions. This article examines the crypto exchange dispute, Binance’s defense, and the ongoing asset recovery efforts in the crypto market.
Binance Challenges FTX’s Allegations
FTX Lawsuit Against Binance stems from a 2021 transaction where FTX repurchased a 20% stake from Binance, allegedly using $1 billion in customer funds. FTX claims this deal, involving BNB, BUSD, and FTT tokens, was fraudulent and exacerbated its financial woes, leading to its 2022 bankruptcy. The suit targets Binance, CZ, and other executives, asserting their actions destabilized the crypto exchange dispute.
On May 20, 2025, Binance filed a motion to dismiss, arguing the FTX Lawsuit Against Binance lacks legal grounding and aims to deflect blame from FTX’s former CEO, Sam Bankman-Fried, who is serving a 25-year sentence for fraud. Binance contends:
- FTX operated normally for 16 months post-transaction, with no evidence of illegality.
- CZ’s November 2022 tweet about selling FTT holdings followed a CoinDesk report exposing FTX’s financial issues, not causing the collapse.
Binance asserts the tweets were factual and not manipulative, refuting claims of market panic.
Read more: Second FTX Repayment Wave to Distribute More Than $5 Billion
Jurisdictional and Legal Arguments
FTX Lawsuit Against Binance faces jurisdictional hurdles, as Binance argues the defendants, non-U.S. residents, conducted no direct transactions in the U.S., rendering the Delaware court’s authority invalid. This claim strengthens Binance’s push to nullify the crypto exchange dispute without liability.
The lawsuit is part of FTX’s broader asset recovery efforts, aiming to recoup over $11 billion for creditors. The 2021 deal, FTX alleges, was funded with 60% customer deposits without disclosure, violating fiduciary duties. Binance counters that FTX’s mismanagement, not the transaction, led to its downfall.
Next Steps and Market Implications
FTX Lawsuit Against Binance awaits a ruling from the Delaware judge. A dismissal would absolve Binance of responsibility, while a denied motion could trigger investigations or settlement talks. FTX’s recovery trustee plans to begin creditor distributions by May 30, 2025, intensifying pressure to resolve such disputes.
Online discussions reflect divided sentiments: some support FTX’s asset recovery efforts, while others view the suit as a scapegoating tactic. The crypto market, buoyed by a 2025 altcoin surge, watches the case closely. The outcome could influence exchange accountability and investor trust.
Conclusion
FTX Lawsuit Against Binance, demanding $1.76 billion, faces a critical test as Binance seeks dismissal, calling it a baseless attempt to shift blame. The crypto exchange dispute highlights tensions in the crypto market, with FTX’s asset recovery efforts at stake. As the court deliberates, the case could reshape regulatory expectations for digital asset platforms.
