Binance is swinging back hard at FTX’s $1.8 billion lawsuit, calling it legally deficient and questioning U.S. court jurisdiction. The dispute centers on a controversial tweet by former CEO Changpeng Zhao about FTT holdings liquidation, which allegedly triggered FTX’s downfall. Binance argues the case belongs outside American courts since transactions occurred internationally. Pretty rich coming from FTX, considering their own spectacular bankruptcy. The plot thickens as both crypto giants duke it out in an increasingly heated legal battle.
Cryptocurrency exchange giant Binance is fighting back against a massive $1.8 billion lawsuit from bankrupt rival FTX, calling the claims “legally deficient” in a recent motion to dismiss. The lawsuit, filed in November 2024, alleges market manipulation and fraudulent transfers – accusations that Binance isn’t taking lying down.
The irony isn’t lost on anyone: FTX, whose founder Sam Bankman-Fried is currently cooling his heels with a 25-year prison sentence for fraud, is pointing fingers at Binance for its downfall. Binance’s response? This is rich coming from a company that imploded due to its own internal fraud. The company seeks to recover breaches of fiduciary duty through this legal action. Recent market volatility has only intensified the scrutiny on both exchanges’ past activities.
At the heart of the dispute is a controversial tweet by Binance’s former CEO Changpeng Zhao, announcing the liquidation of FTT holdings. FTX claims this tweet sparked customer panic. But Binance maintains its statements were based on publicly available information. Nothing sneaky about that, they say.
Binance’s tweet about dumping FTT tokens sent shockwaves through crypto markets, but they insist it was just business as usual.
The jurisdictional battle is getting spicy. Binance argues U.S. courts have no business handling this case since the transactions didn’t even happen on American soil. The lawsuit focuses on a 20% equity stake buyback that FTX repurchased from Binance in 2021. It’s like trying to referee a soccer match played in Brazil from a booth in Detroit – it just doesn’t make sense.
FTX isn’t backing down, though. They’re claiming Binance’s actions were driven by fear of losing its top-dog status in the crypto world. The lawsuit suggests money used to pay Zhao was illegally siphoned from customer accounts. Talk about a plot twist.
The stakes are huge. As the largest cryptocurrency exchange by trading volume, Binance’s involvement in this legal drama has the whole crypto market watching. The outcome could set precedents for how international clawback claims are handled in the future.
Meanwhile, FTX continues its broader efforts to recover lost assets, with this lawsuit being just one piece of a very complicated puzzle. The crypto world waits and watches as these two giants duke it out in court, wondering if U.S. jurisdiction will even stick.
