Binance co-founder Changpeng Zhao is urging a U.S. court to throw out a massive $1.7 billion lawsuit brought by the FTX bankruptcy estate, arguing that American laws shouldn’t apply to a foreign citizen in an offshore transaction.
In a new filing submitted to the Delaware Bankruptcy Court, Zhao’s legal team slammed the case as a jurisdictional overreach, calling it an attempt to pin Sam Bankman-Fried’s alleged misconduct on unrelated parties. According to Zhao, the lawsuit wrongly portrays him as a central player in FTX’s downfall, when in fact he was only a minor participant in a broader business deal.
Zhao, a resident of the UAE, claims the entire transaction took place outside U.S. borders, involving Binance entities registered in Ireland, the Cayman Islands, and the British Virgin Islands. His lawyers argue that U.S. bankruptcy law has no reach over such international dealings, especially when the contracts in question fall under safe harbor protections meant to shield certain financial transactions from clawback attempts.
Describing the lawsuit as “extraterrestrial,” Zhao’s team emphasized that the case lacks both geographic and legal grounding in the U.S.
The legal defense also pushed back on claims of deep ties between Binance and FTX, describing the relationship as short-lived and purely transactional. Binance once held a 20% stake in FTX, but Zhao said the partnership quickly unraveled over personal and strategic differences.
Two other Binance-linked individuals named in the case—Samuel Wenjun Lim and Dinghua Xiao—have also filed for dismissal, saying the allegations go too far and lack legal basis.
The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Source: https://coindoo.com/changpeng-zhao-rejects-ftx-blame-says-u-s-law-doesnt-apply-offshore/