Changpeng Zhao, the founder and former CEO of Binance, has requested the dismissal of a $1.76 billion repayment lawsuit filed by the FTX bankruptcy estate. Filed on Monday, Zhao’s appeal argues that as a resident of the United Arab Emirates, he is not subject to the personal jurisdiction of the Delaware court. The lawsuit, which was initiated in November 2024, is rooted in a share buyback agreement from July 2021. Zhao’s defense claims that the allegations extend beyond the boundaries established by American bankruptcy laws.
FTX Bankruptcy’s $1.76 Billion Allegation
The FTX bankruptcy estate accuses Zhao and Binance of unlawfully seizing approximately $1.76 billion in cryptocurrency during their share buyback transactions from former CEO Sam Bankman-Fried. The allegations state that Binance acquired cryptocurrency under a payment package to repurchase 20% of its global operations and 18.4% of its American subsidiary’s shares.
FTX lawyers categorize these transactions as “fraudulent transfers” and maintain that Zhao and other executives are obligated to repay the funds. The documents suggest that the FTX coins held by Binance and the exchanged cryptocurrencies were subject to securities registration. The court is expected to decide whether the claims can be extended beyond American bankruptcy laws.
Zhao’s Jurisdiction Challenge
In Zhao’s legal filing, he emphasizes his residence in the United Arab Emirates, stating that the Delaware court does not have jurisdiction over him. The lawsuit contends that the plaintiffs improperly seek to extend bankruptcy laws to foreign activities, stating, “The fraudulent transfer claims request an unjust extension of bankruptcy laws beyond U.S. borders.”
It is further argued that the transactions in question are cross-border in nature and that the relevant American laws do not possess transnational reach. In a related jurisdiction challenge, Samuel Wenjun Lim and Dinghua Xiao argued in July that the claims were unconstitutional.
