Key Takeaways:

• Binance strikes to dismiss FTX’s $1.76B lawsuit, calling it “legally poor” and blaming FTX’s inside fraud.
• The lawsuit stems from a 2021 buyback deal, with FTX alleging misuse of buyer funds.
• Binance defends CZ’s 2022 tweet as a response to public studies, not an act of market manipulation.

Binance has formally responded to the FTX property’s $1.76 billion lawsuit with a pointy rebuttal, submitting a movement to dismiss the case completely. The change says the claims aren’t solely meritless but in addition an try and rewrite the historical past of FTX’s collapse—a downfall it attributes to Sam Bankman-Fried’s large fraud, not any exterior affect.

FTX’s Buyback Allegations and Binance’s Response

In 2021, FTX repurchased a 20% stake beforehand bought to Binance for $1.76 billion, paid in a mixture of BNB, BUSD, and FTT. Now, the FTX property alleges that the repurchase was financed improperly utilizing buyer property, at a time when the change was already bancrupt.

Binance, in its Could 16 court docket submitting, rejected the premise completely. Its authorized crew argues that FTX remained operational for 16 months following the deal—hardly the habits of an organization on the point of collapse. The movement provides that the buyback was executed transparently and concerned no purple flags on the time.

“Plaintiffs are pretending that FTX didn’t collapse as the results of one of the crucial large company frauds in historical past,” Binance said, immediately referencing Sam Bankman-Fried’s felony conviction on seven counts of fraud and conspiracy.

Learn Extra: Backpack Begins Declare Course of for FTX EU Fund After Buying FTX Subsidiary

CZ’s Tweet within the Highlight Once more

Was the FTT Tweet a Set off—or a Warning?

FTX additionally claims {that a} tweet by then-Binance CEO Changpeng Zhao (CZ) on November 6, 2022—which introduced plans to liquidate Binance’s FTT holdings—sparked panic withdrawals and led to its eventual implosion.

Binance contends this narrative is deceptive. The tweet, it says, got here simply days a damning report on Alameda Analysis’s stability sheet, exhibiting that a good portion of its property have been illiquid FTT tokens. Binance claims it merely acted on that public info to mitigate threat, to not manipulate markets.

“The criticism comprises no info to recommend that the tweets have been false,” the submitting states, reinforcing that CZ’s statements mirrored real threat administration.

Actually, Binance had obtained roughly $2.1 billion in FTT and BUSD as a part of its FTX fairness exit deal. Binance said it needed to liquidate its holdings responsibly to attenuate market disruption—an intent FTX now calls into query with out providing substantive proof.

Jurisdiction and Authorized Grounds Beneath Hearth

Binance’s protection additionally takes purpose on the authorized foundation of the case. The change says the court docket lacks jurisdiction as a result of not one of the entities named are U.S.-based or carried out enterprise from america. This argument leans on established safe-harbor protections and challenges the FTX property’s try to use U.S. state legal guidelines in a chapter continuing.

Calling the criticism “a seize bag of speculative state claims,” Binance emphasised that a lot of the swimsuit depends on hindsight and the phrase of “a convicted fraudster.”

Learn Extra: Gemini and SEC Ask for 60-Day Lawsuit Pause to Examine Potential Decision

The Larger Image: Billions at Stake in FTX’s Restoration Efforts

The authorized battle unfolds because the FTX property prepares a second spherical of creditor repayments beginning Could 30. Over $5 billion is anticipated to be distributed by way of BitGo and Kraken to comfort class collectors, with whole repayments presumably reaching $16 billion. Nevertheless, the $1.76 billion declare towards Binance stays one of many property’s most high-profile authorized maneuvers.

Binance has requested the court docket to dismiss the swimsuit completely, with prejudice. FTX has but to file a proper response.

As crypto’s most controversial chapter case drags on, the Binance–FTX dispute underscores simply how a lot unfinished enterprise stays within the aftermath of the trade’s most notorious collapse.