- Binance co-founder Changpeng Zhao (CZ) is seeking to dismiss a US$1.76 billion lawsuit from the FTX bankruptcy trust.
- His legal team argues that US courts lack jurisdiction over him because he is a resident of the United Arab Emirates and the transactions in question were between offshore firms.
- The lawsuit, which accuses CZ and other Binance executives of receiving misappropriated funds, stems from a 2021 deal where Binance sold its equity in FTX.
Binance co-founder Changpeng Zhao (CZ) is attempting to exit the US$1.76B (AU$2.71B) lawsuit filed by the FTX bankruptcy trust, arguing that US courts have no jurisdiction over him due to his residency in the United Arab Emirates.
CZ Claims US Courts Have No Jurisdiction
Zhao’s legal team filed a motion on Monday with the US Bankruptcy Court in Delaware, according to Bloomberg Law, asserting that the claims lie well beyond the court’s territorial authority.
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“The claims are so far removed from Delaware and even the United States that the statutes at issue, which lack extraterritorial application, do not even apply,” his attorneys wrote in the filing, adding that “plaintiffs nonsensically blame Mr. Zhao and others for Mr. Bankman-Fried’s failings”.
The case, brought by the FTX bankruptcy trust in November 2024, accuses Zhao, Binance, and former executives of receiving billions in misappropriated funds from Sam Bankman-Fried’s collapsed empire.
Breakup Deal Takes Center Stage as Zhao Distances Ties
Central to the lawsuit is a July 2021 deal where Binance exited its equity positions in both FTX International and FTX US, holding 20% and 18.4% stakes, respectively.
Zhao’s team maintains the deal was executed between offshore firms and settled in crypto, distancing it from U.S. regulatory oversight. According to the filing, Binance and FTX “were briefly business partners” before parting ways, with Zhao returning equity in exchange for digital assets, including FTT tokens.
Zhao recently completed a four-month prison term after pleading guilty to US anti-money laundering violations. Meanwhile, Bankman-Fried is serving a 25-year sentence for fraud and conspiracy.
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