Key Takeaways:
- Binance strikes to dismiss FTX’s $1.76B lawsuit, calling it “legally poor” and blaming FTX’s inner 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 totally. The change says the claims will not be solely meritless but additionally an try to rewrite the historical past of FTX’s collapse—a downfall it attributes to Sam Bankman-Fried’s huge fraud, not any exterior affect.
FTX’s Buyback Allegations and Binance’s Response
In 2021, FTX repurchased a 20% stake beforehand offered 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 belongings, at a time when the change was already bancrupt.
Binance, in its Might 16 court docket submitting, rejected the premise totally. Its authorized staff 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 pink flags on the time.
“Plaintiffs are pretending that FTX didn’t collapse as the results of one of the vital huge company frauds in historical past,” Binance acknowledged, instantly referencing Sam Bankman-Fried’s prison conviction on seven counts of fraud and conspiracy.
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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, displaying that a good portion of its belongings have been illiquid FTT tokens. Binance claims it merely acted on that public info to mitigate danger, to not manipulate markets.
“The criticism incorporates no information to recommend that the tweets have been false,” the submitting states, reinforcing that CZ’s statements mirrored real danger administration.
In truth, Binance had acquired roughly $2.1 billion in FTT and BUSD as a part of its FTX fairness exit deal. Binance acknowledged it needed to liquidate its holdings responsibly to reduce market disruption—an intent FTX now calls into query with out providing substantive proof.
Jurisdiction and Authorized Grounds Below Fireplace
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.”
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The Greater 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 Might 30. Over $5 billion is anticipated to be distributed by way of BitGo and Kraken to comfort class collectors, with whole repayments probably reaching $16 billion. Nonetheless, 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 totally, 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 business’s most notorious collapse.
