Michaela
Crypto exchange Binance has moved to dismiss a $1.76 billion lawsuit brought by now-defunct crypto exchange FTX, arguing that the claims unjustly hold the company and its former CEO, Changpeng Zhao, responsible for FTX’s collapse.
In a May 16 filing submitted to the Delaware Bankruptcy Court, Binance’s lawyers described the lawsuit as “legally deficient,” arguing that FTX’s downfall stemmed from internal mismanagement and misconduct rather than any alleged market manipulation or hostile actions by Binance.
“Plaintiffs allege that a series of November 2022 “Tweets”—posted on the accounts of Binance’s former CEO, Defendant Changpeng Zhao, and the “@binance” account, in the wake of public reports calling into question Debtors’ financial condition—were intended to “destroy” FTX, and they assert a variety of state law claims based on that theory,” the filing wrote.
FTX’s estate alleged that Binance received billions of dollars in cryptocurrency through a 2021 share buyback agreement, funded inappropriately using customer assets.
In response, Binance rejected the accusation, arguing that FTX continued to operate as a going concern for 16 months following the deal. Binance further maintained that there is “no plausible claim” that FTX was insolvent at the time of the transaction.
Additionally, Zhao was accused of contributing to FTX’s downfall through a post made on X (formerly Twitter) on November 6, 2022, in which he announced that Binance would liquidate its holdings of FTT, the native token of the FTX exchange.
Binance argued that Zhao’s post reflected concerns already publicly available at the time. Its legal team stated that the decision to liquidate the exchange’s remaining FTT holdings was driven by newly surfaced information, specifically a CoinDesk report revealing details about Alameda Research’s balance sheet.
The company also defended Zhao’s statement regarding Binance’s commitment to minimizing market impact, noting that “the Complaint contains no evidence” to suggest the firm had any intention of acting otherwise.
Binance’s filing further challenges FTX’s allegations, describing them as a “collection of state law claims” rooted in speculation and largely derived from the retrospective assertions of a “convicted fraudster.”
Furthermore, Binance has requested the court to dismiss all claims with prejudice.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
