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Changpeng Zhao Pushes to Dismiss FTX’s $1.8 Billion Claim Over 2021 Crypto Deal

Key Takeaways

  • ​Changpeng Zhao asked a US court to dismiss FTX’s $1.8 billion suit by saying the 2021 deal happened entirely outside the US;
  • Zhao’s lawyers said he did not control or receive the crypto and was just a named party in the transaction;
  • Zhao denied causing FTX’s collapse and claimed that the company failed due to its own actions.

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Changpeng Zhao Pushes to Dismiss FTX’s $1.8 Billion Claim Over 2021 Crypto Deal

Changpeng "CZ" Zhao, the former CEO of Binance $7.34B , has asked a US bankruptcy court to reject a $1.8 billion lawsuit brought by the crypto exchange FTX.

The case centers on a 2021 deal where FTX used crypto to buy back its shares from Binance.

Zhao stated in an August 4 court filing in Delaware that the case tries to hold him responsible for actions taken by FTX’s founder, Sam Bankman-Fried.

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He argued that none of the events tied to the share buyback took place in the United States. He pointed out that the Binance firms involved are based in Ireland, the Cayman Islands, and the British Virgin Islands.

Because the deal happened outside the US, Zhao’s lawyers said the legal rules being used in the case do not apply. They also argued that Zhao did not control or receive the crypto involved. The agreement used two tokens, Binance USD (BUSD) and FTX Token (FTT).

According to Zhao’s legal team, he was not the one who received the funds and only acted as a “nominal counterparty” in the transaction.

FTX also claimed that Zhao’s posts on X added to its collapse. Just before FTX filed for bankruptcy, Zhao posted about Binance selling off its FTT holdings.

Zhao argued that FTX’s failure came from its own wrongdoing. His filing described the company as "a fraudulent enterprise" and argued that it would have collapsed regardless of what he said.

Recently, a US Appeals Court overturned Nathaniel Chastain’s conviction in the OpenSea NFT case. What did they say? Read the full story.

Aaron S. Editor-In-Chief
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.
With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.
Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.
Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.

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