The cryptocurrency exchange Binance has filed a motion in court to dismiss a lawsuit brought by FTX for $1.76 billion. This case arose in 2024 when FTX accused Binance of fraud related to a stock buyback funded by customer funds. Binance claims that the lawsuit is legally invalid.
This is reported by Business • Media
Details of the FTX Lawsuit
FTX filed its lawsuit in November 2024, alleging that the $1.76 billion stock buyback deal was “fraudulent.” The exchange acquired 20% of FTX shares in 2019 and, a year later, additionally purchased 18.4% of the organization West Realm Shires (WRS), with both transactions executed in BNB tokens. In July 2021, FTX repurchased these shares using FTT, BNB, and BUSD tokens.
During the trial of former FTX CEO Sam Bankman-Fried, it was revealed that deposited capital was used for this transaction. In its lawsuit, FTX emphasized the bankruptcy of the portfolio organization Alameda Research, which was part of the FTX Group at the time of the deal, and accused Binance CEO Changpeng Zhao of deliberately worsening the situation through his public statements about FTX’s financial condition.
Binance’s Response
Binance denies these allegations, noting that FTX is attempting to shift the blame for its problems onto them. The exchange considers the lawsuit legally invalid and claims it is not subject to the jurisdiction of U.S. authorities. The motion states that “the plaintiffs are trying to conceal that the collapse of FTX was the result of one of the largest corporate frauds in history.”
“FTX successfully operated for another 16 months after the deal, and at that time there was no evidence of its insolvency.”
Binance also points out that Zhao’s social media posts, which allegedly caused panic, were based on publicly available data, including a CoinDesk article. Zhao himself was not involved in the sale of shares in 2021, so he cannot be held responsible in this matter. Bankman-Fried claimed that it was Binance that leaked Alameda Research’s financial report to the press; however, Binance called these accusations “unfounded” and “based on the speculations of a convicted criminal.”