Former Binance CEO Changpeng “CZ” Zhao has filed a motion in the U.S. Bankruptcy Court for the District of Delaware seeking dismissal from a $1.76 billion clawback lawsuit initiated by the FTX bankruptcy trust, according to Bloomberg Law.
The suit, filed in November 2024, accuses Binance and its executives of receiving funds improperly transferred by FTX founder Sam Bankman-Fried as part of a 2021 share repurchase deal.
Zhao argues the court lacks jurisdiction, citing his residency in the United Arab Emirates. “The complaint does not establish general jurisdiction because it does not allege that Mr. Zhao is ‘at home’ in Delaware,” his legal filing states. He further contends that the claims have “no extraterritorial application,” as the transactions involved entities incorporated in Ireland, the Cayman Islands, and the British Virgin Islands.
Co-founder Changpeng Zhao became the latest Binance Holdings Ltd.-affiliated person to ask a bankruptcy court to dismiss claims against him from an FTX trust seeking to claw back $1.76 billion that it said was improperly transferred by Sam Bankman-Fried. https://t.co/3sNSVkt15b
— Bloomberg Law (@BLaw) August 5, 2025
The trust alleges that Binance, Zhao, and former executives Samuel Wenjun Lim and Dinghua Xiao, who also filed dismissal motions in July, received funds from the deal through which Binance sold its 20% stake in FTX’s international unit and 18.4% stake in its U.S. affiliate. According to court filings, Alameda Ltd., a British Virgin Islands entity, facilitated the transfer.
Zhao maintains he was only a “nominal counterparty” in the transaction and accuses the trust of “nonsensically” blaming him and Binance for FTX’s collapse and Bankman-Fried’s misconduct. He also asserts that U.S. bankruptcy law does not extend to foreign transfers and that the complaint fails under safe harbour provisions protecting securities-related transactions.
The case, FTX Digital Mkts. Ltd. v. Binance Holdings Ltd. continues as the trust seeks to recover the disputed funds. Zhao is represented by Baker & Hostetler LLP, while White & Case LLP and Richards, Layton & Finger PA represent the FTX trust. Bankman-Fried is serving a 25-year prison sentence, while Zhao recently completed a four-month sentence for U.S. anti-money-laundering violations.
If you want to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram, and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
