CZ Seeks Dismissal Of “Nonsensical” $1.76B FTX Clawback Lawsuit

Former Binance CEO Changpeng ‘CZ’ Zhao has filed a motion to dismiss a lawsuit from FTX that aims to recover nearly $1.8 billion.

Sam Bankman-Fried’s FTX filed a lawsuit against its competitor Binance and CZ on 10 November 2024. The lawsuit seeks damages, accusing Binance of playing a key role in it’s downfall.

However, according to a 4 August 2025 filing on Zhao’s behalf, “Plaintiffs nonsensically blame Mr Zhao and others for Mr Bankman-Fried’s failings.”

Zhao calls the claim “legally unfounded” and “outright incoherent.” His legal team insisted that “while Plaintiffs and Binance were rivals, they were also briefly business partners when the Binance Defendants owned about a 20% stake in FTX Trading. But Zhao and Bankman-Fried could not work together, and the parties separated.”

BREAKING: Binance co-founder CZ wants out of the $1.8B FTX lawsuit.

He just told the US court it has no jurisdiction over him because he lives in the UAE and the case is about offshore deals.

If this holds, CZ might walk away untouched. pic.twitter.com/wBdQw7YRdb

— Crypto Patel (@CryptoPatel) August 6, 2025

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FTX Lacks Jurisdiction Over UAE Citizen CZ

Zhao’s legal team’s primary argument is that the US court lacks jurisdiction over Zhao, who is a citizen and resident of the United Arab Emirates (UAE). The motion contends that the case is far removed from the US, as the transactions and entities involved were all based offshore.

Zhao’s lawyers also asserted that he was not a direct recipient of the funds in question.

The legal team described CZ as “nominal counterparty” in the transaction. This essentially means that he did not have personal possession or control over the crypto that was exchanged. The deal involved Binance (BUSD) and FTX token (FTT).

Meanwhile, FTX, now managed by a team working t repay creditors, alleges that the 2021 share buyback was funded with customer money, constituting a fraudulent transfer.

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FTX Declares War On Binance And Zhao For Triggering A Liquidity Crises

FTX was once one of the largest cryptocurrency exchanges in the world, but it filed for bankruptcy in November 2022. Revelations of financial mismanagement and fraud remains the main reason behind its collapse.

Importantly, the company’s downfall led to billions of dollars in losses for investors and shaking public confidence in digital assets.

The lawsuit accused Binance and its former CEO Changpeng Zhao of engaging in actions that exacerbated FTX’s financial instability.

Specifically, FTX claims that Binance’s decision to sell off a large portion of its holdings in FTT—the native token of FTX—triggered a liquidity crisis that ultimately led to FTX’s collapse. In early November 2022, Zhao publicly announced that Binance would liquidate its entire position in FTT due to “recent revelations” about FTX’s financial health.