Binance has filed a request with the Delaware bankruptcy court to dismiss a lawsuit brought by the new management of the bankrupt cryptocurrency exchange FTX, seeking to recover $1.76 billion related to a 2021 stock buyback deal, and attempted to blame its collapse on the criminal misconduct of its founder Sam Bankman-Fried.
Binance's legal team described the lawsuit as "legally flawed," adding that the bankruptcy of FTX was the result of internal failures, not any wrongdoing on the part of Binance.
According to the filing, the lawsuit "goes to almost ridiculous lengths to downplay" the role of Sam Bankman-Fried, who was convicted in 2023 on 7 counts related to fraud, conspiracy, and money laundering, and is now serving a 25-year federal prison sentence.
Plaintiffs are suing Binance over a deal made in July 2021, in which the former sold its stake in FTX to the company, in return receiving a large amount of cryptocurrency assets, which FTX claims were illegally withdrawn from customer deposits.
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