Binance moves to quash FTX’s $1.8 billion lawsuit, dismisses allegations as speculative

Binance has asked a US court to dismiss FTX’s $1.76 billion lawsuit, arguing that the case lacks jurisdiction and relies on unsupported allegations.

The motion follows FTX’s attempt to claw back funds and blame Binance and its former CEO, Changpeng Zhao, for contributing to its collapse.

However, Binance has rejected these claims, calling them speculative and legally flawed.

Binance counters FTX

In its filing, Binance argued that the US court lacks authority over the foreign entities named in the case.

The exchange pointed out that none of the defendants resided in the US and that the disputed agreements were governed by Hong Kong law.

Binance also emphasized that its entities were not party to the original share purchase agreements, further weakening FTX’s jurisdictional claims.

The firm stated:

“Plaintiffs do not sufficiently allege that any of the BHL Defendants had a reasonable expectation of being haled into American courts in connection with any of the alleged events.”

The exchange also aimed at FTX’s insolvency argument, asserting that the claim relies on unproven assumptions.

According to Binance, FTX was not demonstrably insolvent at the time of the disputed July 2021 transactions, and even if it were, the legal theory collapses under scrutiny.

Binance wrote:

“If FTX truly were insolvent as of July 2021, then there was no value left to be ‘destroyed’ in November 2022. But even more fundamentally, in advancing this theory, Plaintiffs are pretending that FTX did not collapse as the result of one of the most massive corporate frauds in history.”

Zhao’s tweets and the alleged bank run

The filing also addressed claims that Changpeng Zhao sparked a bank run through social media, describing those accusations as exaggerated. Binance maintained that Zhao’s posts were accurate and did not mislead the public.

Binance said:

“Plaintiffs come nowhere close to showing how the alleged Tweets of a foreign CEO and a foreign trading platform concerning another foreign trading platform can be said to have targeted the US such that the BHL Defendants should have anticipated defending litigation here.”

Binance also pointed out that its decision to liquidate its FTT holdings in 2022 was driven by market risk, not by an intent to harm FTX.

The exchange further argued:

“Binance itself was subject to significant uncertainty that the unraveling of FTX’s massive fraud was creating in the marketplace. Binance was plainly motivated to preserve its own business and make clear the measures it was taking to do so.”

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