Ex-Binance CEO Seeks Dismissal From $1.8 Billion FTX Trust Suit

Co-founder Changpeng Zhao became the latest Binance Holdings Ltd.-affiliated person to ask a bankruptcy court to dismiss claims against him from an FTX trust seeking to claw back $1.76 billion that it said was improperly transferred by Sam Bankman-Fried.

The trust and FTX Digital Markets Ltd. can’t allege facts that Zhao was “at home” under Delaware’s jurisdiction because he’s a resident of the United Arab Emirates, Zhao said in a Monday motion to dismiss in the US Bankruptcy Court for the District of Delaware.

“The claims are so far removed from Delaware, and even the United States, that the statutes at issue, which lack extraterritorial application, do not even apply,” Zhao said.

The trust and FTX Digital Markets sued Binance and several executives in November 2024 over a July 2021 share repurchase deal with Bankman-Fried.

Two former Binance executives, Samuel Wenjun Lim and Dinghua Xiao, urged the court in July to dismiss them from the suit.

The trust alleges Binance and the former executives received the funds as part of the deal through which they sold stakes of about 20% in FTX’s international unit and 18.4% in its US-based entity.

Alameda Ltd, a British Virgin Islands company, transferred the funds for FTX, according to court records. The Binance entities are incorporated in Ireland, the Cayman Islands, and BVI, making the transaction extraterritorial, the Monday filing said.

Zhao alleged he was a “nominal counterparty” in the transaction.

The trust and FTX Digital Markets “nonsensically blame” Zhao and Binance for Bankman-Fried’s “pervasive malfeasance” and the collapsed crypto exchange, the Monday filing said.

The two crypto firms were “briefly business partners” and Binance had a 20% stake in FTX before they separated over “personal grievances” and the equity was exchanged for cryptocurrency, Zhao said.

Serving US counsel on a foreign defendant is improper under bankruptcy law and invalidates the complaint, the motion said. US bankruptcy law also doesn’t definitively extend to foreign transfers, Zhao said.

The trust and FTX Digital Markets improperly attempt to extend their fraudulent transfer claims abroad, the filing said. The constructive fraud claims also don’t meet legal requirements under safe harbor provisions, which permit “qualifying transactions” connected to a securities contract under federal law, Zhao said.

Zhao served four months in prison after he pleaded guilty to US anti-money-laundering violations, while Bankman-Fried is serving a 25-year sentence after being convicted of seven offenses, including fraud and conspiracy.

The trust and FTX Digital Markets didn’t immediately respond to a request for comment.

Baker & Hostetler LLP represents Zhao. White & Case LLP and Richards, Layton & Finger PA represent the trust and FTX Digital Markets.

The case is FTX Digital Mkts. Ltd. v. Binance Holdings Ltd., Bankr. D. Del., No. 24-ap-50222, motion to dismiss 8/4/25.