Binance’s legal dispute with FTX has taken a new turn, with Binance filing a motion to dismiss the $1.76 billion lawsuit filed by the FTX bankruptcy estate. Binance believes the lawsuit is baseless and appears to be a blame-shifting attempt.
Both parties have been at loggerheads since FTX’s decline. In a filing submitted to the Delaware Bankruptcy Court on May 16, Binance argued that FTX’s failure had nothing to do with Binance or any alleged wrongdoing. Instead, it had everything to do with internal fraud.
Binance’s filing maintains that FTX didn’t collapse due to a hostile competitor. Instead, it argues that the collapse was triggered by massive fraud from within. Binance also pointed to the conviction of Sam Bankman-Fried, the former FTX CEO, who was found guilty of seven counts, including fraud and conspiracy.
What Sparked the Lawsuit?
FTX’s estate claims that Binance received billions in crypto during a 2021 share buyback deal. The new management claims the funds were allegedly misappropriated from customer funds. Binance denies these allegations, stating that FTX remained financially active for over a year after that deal. According to them, there’s no proof FTX was insolvent at the time.
The lawsuit also points a finger at former Binance CEO Changpeng Zhao, claiming his famous tweet in 2022 contributed to FTX’s disastrous end. In the tweet, Zhao announced Binance would liquidate its FTT token holdings, which some believe triggered a selloff and FTX’s final collapse.
As part of Binance’s exit from FTX equity last year, Binance received roughly $2.1 billion USD equivalent in cash (BUSD and FTT). Due to recent revelations that have came to light, we have decided to liquidate any remaining FTT on our books. 1/4
— CZ 
BNB (@cz_binance) November 6, 2022
Binance dismissed that theory, saying the tweet was based on already public information, especially a CoinDesk report that raised red flags about Alameda Research’s balance sheet just days earlier.
They also defended Zhao’s comments about “minimizing market impact,” saying there’s no evidence Binance acted with malicious intent.
We will try to do so in a way that minimizes market impact. Due to market conditions and limited liquidity, we expect this will take a few months to complete. 2/4
— CZ BNB (@cz_binance) November 6, 2022
Questioning the Court’s Authority
Binance also mentioned jurisdiction as one of its core concerns. The crypto exchange argues that the entities named in the lawsuit operate outside the U.S. and therefore do not fall under U.S. court authority.
Moreover, Binance accused the FTX estate of relying on “speculation” and cherry-picked claims. As a result, Binance’s lawyers are asking the court to dismiss the case entirely and with prejudice, meaning FTX wouldn’t be able to file it again.
Disclaimer
The information discussed by Altcoin Buzz is not financial advice. This is for educational, entertainment, and informational purposes only. Any information or strategies are thoughts and opinions relevant to the accepted risk tolerance levels of the writer/reviewers, and their risk tolerance may differ from yours. We are not responsible for any losses you may incur due to any investments directly or indirectly related to the information provided. Bitcoin and other cryptocurrencies are high-risk investments, so please do your due diligence. Copyright Altcoin Buzz Pte Ltd.
The post Binance Moves to Toss $1.76B FTX Suit, Points Finger at SBF appeared first on Altcoin Buzz.
