In a new filing with the Delaware Bankruptcy Court, Zhao's legal team criticized the lawsuit as being beyond jurisdiction, calling it an effort to blame unrelated parties for the misconduct of Sam Bankman-Fried.
According to Zhao, the lawsuit has misrepresented his role in the collapse of FTX, while in reality, he was merely a minor participant in a larger business deal.
Zhao, a UAE resident, asserted that the entire transaction took place outside U.S. borders, involving Binance entities registered in Ireland, the Cayman Islands, and the British Virgin Islands.
His attorney argued that U.S. bankruptcy law does not apply to such international transactions, especially when the contracts in question fall within the protection of safe harbor regulations designed to protect certain financial transactions from debt recovery efforts.
Describing the lawsuit as 'extraterrestrial', Zhao's team emphasized that this lawsuit lacks both geographical and legal basis in the United States.
The defense also dismissed the allegations of a deep relationship between Binance and FTX, describing this relationship as only existing for a short time and being entirely transactional. Binance once held 20% of FTX's shares, but Zhao stated that this partnership quickly fell apart due to personal and strategic differences.
Two other individuals linked to Binance named in the case—Samuel Wenjun Lim and Dinghua Xiao—have also filed for dismissal, arguing that the allegations have gone too far and lack legal basis.
