Binance Seeks to Dismiss FTX’s $1.8 Billion Lawsuit, Calls Claims Speculative

Binance has filed a motion in a U.S. court to dismiss FTX’s lawsuit, which amounts to $1.76 billion. The exchange contends that the court lacks jurisdiction and that the allegations presented are unfounded.

This legal action follows FTX’s efforts to recover funds while placing blame on Binance and its former CEO, Changpeng Zhao, for their alleged role in FTX’s demise.

Binance has dismissed these allegations as speculative and legally unsound.

In its legal documents, Binance asserted that the U.S. court does not hold jurisdiction over the foreign entities listed in the case. The exchange pointed out that none of the defendants were based in the U.S. and that the relevant agreements fell under Hong Kong law.

Additionally, Binance highlighted that its subsidiaries were not involved in the initial share purchase agreements, further undermining FTX’s claims related to jurisdiction.

The firm stated, “Plaintiffs do not adequately demonstrate that any of the BHL Defendants had a reasonable expectation of facing litigation in American courts concerning the events in question.”

Binance also challenged FTX’s claim of insolvency, arguing that it is built on unverified assumptions. According to Binance, FTX was not clearly insolvent during the controversial transactions in July 2021, and if it had been, the legal foundation of the claims would be invalid.

Binance noted, “If FTX were truly insolvent as of July 2021, then there would have been no value left to be ‘destroyed’ in November 2022. Furthermore, in promoting this theory, Plaintiffs ignore the fact that FTX collapsed as a result of one of history’s largest corporate frauds.”

The motion also addressed allegations that Zhao triggered a bank run via social media, characterizing these claims as overstated. Binance insisted that Zhao’s statements were truthful and did not mislead anyone.

Binance remarked, “Plaintiffs fail to show how the alleged tweets from a foreign CEO and a foreign trading platform regarding another foreign platform could be considered as targeting the U.S. in a manner that would require the BHL Defendants to anticipate defending against litigation here.”

Furthermore, the exchange clarified that its choice to liquidate its FTT holdings in 2022 was based on market risks, with no intent to harm FTX.

Binance added, “The company faced considerable uncertainty due to the exposure created by FTX’s significant fraud in the market. It was clearly in Binance’s interest to safeguard its own business and communicate the steps it was taking to achieve that.”