Binance has filed a motion in the Delaware Bankruptcy Court to dismiss a $1.76 billion lawsuit filed by the FTX estate. The company claims that the allegations are “legally deficient.” Furthermore, the defunct cryptocurrency exchange is trying to shift responsibility for its demise elsewhere.
It also contends that internal wrongdoing and fraud by its founder, Sam Bankman-Fried, were the direct causes of FTX’s bankruptcy. It cites Bankman-Fried’s conviction on seven charges of conspiracy and fraud as proof that FTX’s leadership’s activities caused the company’s demise.
The lawsuit, which was brought by FTX in November 2024, centers on a 2021 share repurchase agreement in which Binance acquired roughly $1.76 billion in cryptocurrency assets. According to FTX, the transfer was fraudulent because the money was not legitimately obtained from customer deposits.
Binance denies this, stating there was “no plausible claim” that the exchange was insolvent during the transaction. Additionally, Binance asserts that “FTX remained a going concern for 16 months” following the share repurchase.
Binance Challenges Regarding Jurisdiction, Timing, and Letter of Intent
According to Binance, the foreign entities listed in the lawsuit “are incorporated in or maintain their principal place of business in the United States,” which means the Delaware court has no jurisdiction over them. The lawsuit also responds to claims made about Changpeng Zhao, the former CEO, who tweeted in November 2022 that Binance planned to sell off its FTT token holdings. According to FTX, this revelation purposefully caused a market panic, ultimately leading to its demise.
Binance responds that Zhao’s decision was based on readily available material evidence. It revealed troubling information regarding Alameda Research’s balance sheet. The business contends that market responses to this disclosure cannot be construed as a form of legal liability.
Additionally, during its liquidity problem, Binance considered buying the FTX Exchange. FTX claims that Binance signed a non-binding Letter of Intent. It then retracted it in bad faith, which prevented FTX from seeking other funding sources.
Binance, however, insists that there was no legal requirement to finish the deal. Additionally, its due diligence procedure turned up problems that rendered the acquisition unfeasible.
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