Binance has requested the U.S. bankruptcy court to dismiss a $1.76 billion lawsuit filed by the FTX real estate company, accusing the now-defunct exchange of attempting to rewrite history and blame its collapse.
In a filing on May 16 in Delaware Bankruptcy Court, Binance called the lawsuit a "legal deficiency" and based on speculation, not evidence. The filing points to Sam Bankman-Fried's conviction on seven criminal counts, arguing that FTX failed due to internal fraud, not external interference.
Binance's legal team wrote: "The plaintiffs are pretending that FTX did not collapse due to one of the largest corporate frauds in history."
The dispute centers on the 2021 acquisition agreement, when FTX acquired a stake in Binance using cryptocurrency assets including BNB, BUSD, and FTT. FTX real estate alleges that customer funds were misused to finance the deal and is seeking to recover value.
Binance has dismissed that claim, stating that FTX remained operational for more than 16 months after the deal and was not known to be insolvent at that time.
The lawsuit also blames Binance founder Changpeng Zhao (CZ) for contributing to the collapse by tweeting in November 2022 that Binance would liquidate its FTT holdings, causing a wave of withdrawals. Binance argues that Zhao's post referenced publicly available information, including a CoinDesk article revealing the balance sheet of the affiliated company FTX Alameda Research.
Binance stated: "The complaint does not contain any facts showing that the tweets were false or misleading," adding that they intended to reduce the impact on the market, as Zhao has publicly stated.
Binance also challenged the court's jurisdiction, noting that no named entity is based in the U.S. This move calls the lawsuit a "mixed bag" of state claims based on "pure speculation" and urges the court to dismiss all claims with prejudice.
The FTX real estate company filed a lawsuit in November 2024, arguing that Binance played a key role in destabilizing FTX. Bankruptcy administrators alleged that the acquisition was funded with misappropriated customer money and that Binance used its influence to undermine confidence in the rival exchange.
So far, the FTX real estate company has begun to repay creditors and is preparing to distribute more than $5 billion starting on May 30, part of a broader recovery plan that could repay up to $16 billion depending on confirmed claims.
FTX has not yet responded to Binance's move.