In a new filing with the bankruptcy court in Delaware, Zhao's legal team criticized the lawsuit and described it as exaggerated, calling it an attempt to blame unrelated parties for the misconduct of Sam Bankman-Fried.
Zhao stated that the lawsuit presented a misleading picture of his role in the collapse of FTX, whereas he was actually just a secondary participant in a larger business deal.
Zhao, who resides in the UAE, claimed that the entire transaction took place outside the borders of the United States and involved Binance entities registered in Ireland, the Cayman Islands, and the British Virgin Islands.
His lawyers claimed that U.S. bankruptcy law has no effect on such international transactions, especially as the contracts in question fall under the safe harbor provisions designed to protect certain financial transactions from debt collection efforts.
Zhao's team described the lawsuit as "out of this world," emphasizing that it lacks a geographical and legal basis in the United States.
The defense also denied allegations of a close relationship between Binance and FTX, describing the relationship as short-lived and purely transactional. Binance previously held a 20% stake in FTX, but Zhao stated that the partnership quickly fell apart due to personal and strategic disagreements.
Two other individuals associated with Binance, named in the lawsuit - Samuel Wengjun Lim and Dinghua Xiao - also filed requests to dismiss the lawsuit, arguing that the claims went too far and lacked legal basis.