Binance Holdings Ltd. Co-Founder Changpeng “CZ” Zhao has asked a U.S. bankruptcy court to dismiss a $1.76 billion claim filed by an FTX trust, arguing the case falls outside American jurisdiction.
The claim stems from a July 2021 share repurchase deal between Zhao and FTX Founder Sam Bankman-Fried, in which Binance sold its 20% FTX stake in exchange for cryptocurrency.
The FTX trust alleges the funds were improperly transferred by Alameda Ltd., a British Virgin Islands entity linked to FTX, to Binance and its executives.
Zhao Says Claims Fall Outside US Jurisdiction
In an August 4, 2025, motion filed in the U.S. Bankruptcy Court for the District of Delaware, Zhao said he is a resident of the United Arab Emirates (UAE) and “not at home” under Delaware’s jurisdiction. He called the claims “so far removed” from the U.S. that bankruptcy laws, which lack extraterritorial reach, do not apply.
Binance, the world’s largest crypto exchange, was briefly a business partner of FTX before personal and strategic differences led to a split. Zhao described himself as a “nominal counterparty” in the transaction. Two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, also sought dismissal in July.
Background of the Lawsuit
The lawsuit was filed in November 2024, nearly two years after FTX collapsed in November 2022 amid widespread fraud allegations. Bankman-Fried is currently serving a 25-year prison sentence, while Zhao completed a four-month sentence for U.S. anti-money laundering violations.
Zhao’s legal team at Baker & Hostetler LLP argued that serving U.S. counsel on a foreign defendant is improper. They also asserted that safe harbor provisions under federal law protect qualifying securities-related transactions from such claims.
Also Read: FTX and Alameda Stake $125M in ETH and SOL Amid Repayments
