Binance Faces Pushback as it urges a Delaware bankruptcy court to dismiss a $1.76 billion lawsuit filed by the collapsed FTX exchange. Labeling the claims baseless, Binance argues FTX is deflecting blame for its 2022 downfall. This article explores the legal battle, Binance’s defense, and its implications for the crypto exchange industry.
FTX’s Allegations and Binance’s Response
Binance Faces Pushback from FTX’s November 2024 lawsuit, which accuses Binance and former CEO Changpeng Zhao (CZ) of receiving $1.76 billion in fraudulent transfers from FTX’s co-founder Sam Bankman-Fried. FTX claims these funds, tied to a 2021 share buyback, contributed to its financial collapse, alleging Binance’s actions destabilized its operations.
On May 20, 2025, Binance countered, requesting the court to reject the suit. The crypto exchange asserts that the claims lack legal grounding. It argues they aim to shift responsibility from Bankman-Fried. He is currently serving a 25-year sentence for fraud. Binance argues:
- FTX operated normally for 16 months post-transaction, with no evidence of illegality.
- CZ’s November 2022 tweet about selling FTT tokens followed a CoinDesk report exposing FTX’s financial woes, not market manipulation.
Binance further contends that, as non-U.S. residents with no direct transaction involvement, the defendants fall outside the Delaware court’s jurisdiction, weakening FTX’s case.
Read more: FTX Second Repayment Round: Over $5 Billion to Creditors
The Disputed 2021 Transaction
Binance Faces Pushback over a 2021 deal where FTX repurchased Binance’s 20% stake, acquired in 2019, using a mix of BNB, BUSD, and FTT tokens. FTX alleges it was insolvent at the time, funding 60% ($1 billion) of the $1.76 billion deal with customer deposits without disclosure—a fraudulent transfer. Binance refutes this, insisting the transaction was standard and unrelated to FTX’s later insolvency.
This lawsuit is part of FTX’s broader effort to recover over $11 billion for creditors. Asset distribution is set to begin on May 30, 2025. The outcome hinges on whether the court finds merit in FTX’s claims or accepts Binance’s dismissal motion.
Implications for the Crypto Market
Binance Faces Pushback, spotlighting tensions in the crypto exchange sector. A dismissal would shield Binance from liability, reinforcing its position as a leading digital asset platform. However, if the court proceeds, Binance could face prolonged scrutiny, potentially impacting its operations and the broader blockchain industry.
Online discussions reflect divided sentiment: some support Binance’s defense, citing FTX’s mismanagement, while others question the 2021 deal’s transparency. The case underscores the crypto market’s need for clearer regulations, especially as stablecoin and fraud disputes rise.
Conclusion
Binance Faces Pushback in its bid to dismiss FTX’s $1.76 billion lawsuit, arguing the claims are unfounded and outside U.S. jurisdiction. As the Delaware court deliberates, the outcome will shape Binance’s role in the crypto exchange landscape and influence the crypto market’s regulatory path. FTX’s creditor repayments hang in the balance, making this a pivotal moment for the blockchain industry.
