Binance co-founder Changpeng Zhao (CZ) has formally moved to dismiss a $1.76 billion lawsuit filed by FTX's bankruptcy estate in Delaware U.S. Bankruptcy Court, asserting the court lacks jurisdiction over offshore transactions. The lawsuit targets funds transferred from Alameda Ltd. (based in the British Virgin Islands) related to Binance's historical equity holdings in FTX.
In court filings, CZ argued he was merely a "nominal counterparty" in deals executed across three non-U.S. jurisdictions, emphasizing his residency in the UAE renders Delaware an improper venue. He contends U.S. bankruptcy statutes lack extraterritorial reach over foreign transfers. Two former Binance executives joined the dismissal motion on identical grounds earlier.
FTX alleges former CEO Sam Bankman-Fried improperly transferred the funds to Binance pre-collapse and has persistently blamed CZ for its liquidity crisis. Historical precedents suggest low success rates for similar clawback suits involving non-U.S. entities, with past cross-border crypto bankruptcy cases often failing due to jurisdictional hurdles. Market trackers indicate no immediate liquidity or price impacts from the ongoing dispute, which could set critical precedents for international crypto regulations.