Emre Yumlu 
One of the world’s leading crypto exchanges, Binance, has filed a motion to dismiss a $1.76 billion lawsuit initiated by bankrupt exchange FTX. Submitted to the Delaware Bankruptcy Court on May 16, Binance’s legal counsel argued that the case lacks legal merit and that FTX’s collapse was not the result of market manipulation or external interference, but rather stemmed from massive internal fraud.
The filing referenced the conviction of Sam Bankman-Fried (SBF) on seven counts of fraud and conspiracy, stating that, “The plaintiffs are ignoring the fact that FTX fell apart due to one of the largest corporate frauds in recent history.”
Binance Pushes Back Against FTX’s Accusations
According to FTX’s claims, a 2021 share repurchase agreement with Binance was funded by misused customer assets, which allegedly allowed Binance to walk away with billions in crypto. However, Binance firmly denied these allegations, noting that FTX continued to operate for 16 months after the deal, and that there is no reasonable basis to believe the company was insolvent at the time.
CZ’s Tweet and the FTT Fallout
A key point of contention in FTX’s lawsuit is a tweet by former Binance CEO Changpeng Zhao (CZ) on November 6, 2022, which announced the liquidation of the company’s FTT holdings — a move FTX claims escalated panic and accelerated its downfall. In response, Binance argued that the decision was driven by already public concerns, particularly a November 2 report highlighting issues in Alameda Research’s balance sheet.
The filing also defended CZ’s remark about trying to minimize market impact, asserting that no credible evidence was provided to suggest any malicious intent behind the announcement.
Jurisdiction Dispute and Strong Words
Binance further noted that the entities involved are not based in the United States, challenging the jurisdiction of the court in this matter.
In a scathing critique, Binance’s legal team described the complaint as “a collection of speculative claims” based largely on hindsight narratives from a convicted fraudster. As a result, Binance has requested a full dismissal of all charges. As of now, FTX has not issued an official response.
FTX Set to Distribute Another $5 Billion to Creditors
In a parallel development, FTX’s restructuring plan is moving forward, with a second round of repayments scheduled to begin on May 30. According to a May 15 notice, disbursements will be made via BitGo and Kraken, targeting a new group of approved creditors.
Five designated creditor classes, categorized as “convenience classes,” are expected to receive between 54% and 120% of their approved claims. In total, FTX may repay as much as $16 billion, depending on the final volume of validated claims.
These updates mark significant progress in both the legal battle between crypto giants and the long-awaited compensation process for affected users.
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